Adviser Loses Complaint as He Sold it to Himself

We could not believe this when we read an article today, but it will give you an idea as to what financial advisers are up against when trying to secure professional indemnity insurance to protect clients and ourselves when you have such rogue activities going on in our industry at present:

• 70% of claims made by the public to the Financial Ombudsman Service (FOS) are declined, meaning many are unfounded and in most cases, complainants are simply bending the truth, making fake claims or they were advised correctly in the first place.  (Source FOS 2022 Report).

That said, 30% of cases are upheld, which is too many in our opinion, the finance industry has far to go clean up its reputation.  Indeed, it is why we are so thorough and have such detailed research and produce in depth written advice reports to make sure we do the job properly and you get the best advice with the right outcome for you.

Today’s ‘golden nugget’ comes from an article in FTAdviser.com and involves a financial adviser that made a claim for compensation for a defined benefit transfer made in 1990, some 33 years ago.

See: Adviser loses FOS case over DB transfer he 'sold to himself' - FTAdviser

Adviser Sold it To Himself

Upon evidence from Zurich Assurance, the FOS found that the adviser had effectively advised himself on it and he received commission for the sale.  He sold it to himself and got paid for doing it ....  unbelievable!  The former adviser, he was a financial adviser at the time, claimed that his line manager suggested it may be better for him to transfer to a personal pension (they had only just been launched in 1989).

The former adviser claimed that he was advised by his line manager, but evidence produced by Zurich showed that he was a trained adviser at the time, authorised to do Personal Pensions advice and transfers and the fact that he also got paid commission for the transaction demonstrated to the FOS that he had advised himself.

Comment

There are some rogues in our business we agree, but there is insurance, a compensation structure, and a disciplinary system to wheedle out the rogues and long may that effort continue.  That said, we even saw a case a few years ago where the spouse of a former financial adviser made a claim against her husband’s former employer when it was her husband, as the financial adviser, that had actually given the advice to her at the time.  Another shameless attempt to make a claim against a financial services firm.  Her husband advised her for goodness’s sake.

This is what our industry is up against everyday, and we make no apology for doing the job properly for all our clients with full, whole of market research, exploring the ‘good, bad and ugly’ of all options before issuing detailed reports to clients to ensure that you are only given good advice that is suitable for you. 

We usually offer set fee only services, to make sure you receive the lowest initial charges and combined ongoing management charges from pensions, investment, and insurance companies.  Over a period, this may save you many hundreds if not thousands of pounds in additional charges that may have been kept by any financial adviser/pension/insurance company.  In addition, by charging set fees, you know there is no bias, we have agreed a fee with you unlike others that work on a % (the more they sell, the more they get paid).

Watch: How We Charge Our Fees:  How We Quote