IFAs who segregate their client base and turn away low-earners may face complaints when their advice is reviewed by clients’ new advisers, warns Zurich.
UK intermediary sales director Richard Howells says that some advisers are considering focusing on wealthier clients as part of their move towards fee-based advice.
But he warns that clients forced to go elsewhere will inevitably have their past financial services decisions reviewed by their new adviser, who may be quick to point out that the chosen products are not necessarily the most appropriate.
He says the knock-on effect of this could be an increase in the number of complaints against the original adviser.
Howells says: “People choosing high net-worth clients over lower-end clients need to be aware of the realistic impact of doing this.”
Evolve Financial Planning director Jason Witcombe agrees. He says: “There is a lot of truth to the idea that sending clients away may lead to more complaints. The process of client segmentation has to be managed very carefully and it may simply be a case of offering different levels of service.”