IFAs are operating in a hostile trading environment. If we are to survive, we need to be able to focus on client-related issues and be able to give advice in a commercial manner.
Stakeholder and Sandler issues aside, the biggest barrier preventing us from moving forward is the urgent need to define what misselling is.
As professionals, we are ridiculed for poor advice despite the fact that many of us work to the highest levels of integrity and have attained many professional qualifications. We are exposed to criticism while we are unable to define what a missale is and what a “proper” sale is.
Criticism is accepted as part of the job but the hiatus in the PI market has crystallised the issue of misselling into an urgent problem that we must resolve for the financial integrity of our businesses and the peace of mind of our clients.
The regulator has had many years to define misselling and this failure is difficult to understand or justify.
The purpose of this letter is to ask whether MM can take a proactive stance on this issue and act as a focal point for comment. Perhaps we can come up with some ideas to help the regulator.
What is required is a clear definition so that where advice takes place and suitable recommendations have been made taking into account the client's circumstances and all known facts at the time of the sale and that this has been properly documented, this should be classed as a compliant sale.
Once deemed a compliant sale, events thereafter should not lead to compensation in respect of that original sale.
Obtaining a definition of this nature would be beneficial to consumers and advisers. As part of this exercise, I would also welcome a rethink of key features documents.
Complaints tend only to occur when clients have made a loss. If an investment is in equities and cannot be shown to be for a period of 10 years or more, a projection including negative growth makes a lot of sense, given recent events.
This would remove the credibility of those who say that the adviser told them that the investment couldn't fall in value and would prevent the so called sharks misselling in the first place.
While this final point may be controversial, I think that a proper definition of misselling is essential and I hope you are able to help us with this.
Emery (IFA) Associates,