Former financial planner and consultant with Professional Partnerships Gill Cardy is quite cynical about the suitability move.
She says: “The idea that you would write one report which says ‘don’t do it’ but then write a second one to accompany the insistent implementation which says ‘but if you are going to ignore my advice I recommend these funds, or this Sipp/ platform’ will further increase costs. This won’t help get advice to those at the lower value end who are finding themselves unable to transfer.”
She adds that from her point of view the issue of liability remains unresolved.
“There is still no reference to addressing the question of liability if it does in the end go wrong or even partial liability for the part that went wrong. For example, the transfer itself could prove wrong, as the adviser originally warned, but the investment portfolio implemented was fine.
“Alternatively, the transfer itself is not in question, but the investments turn out poorly – which bit gets claimed against? Hence advisers will remain wary of transacting insistent client business.”
Subsequent advice
Billingham continues to worry about the subsequent advice.
“You don’t put them in Cape Verdi or Bulgarian property, you put it somewhere safe, you suggest they carry on topping up their pension to make up for the money they’ve spent, pay off short term debt and divert that money into pensions,” he says.
“In other words, you sit and say let’s pretend you came to me as a planner. You did this yesterday and you can’t put the genie back in the bottle. I can tell you how to mitigate the harm. Say to the client, if you are going to cut off your own leg well ‘Okay’ but let’s use an anaesthetic. Let’s use a tourniquet. Let’s use antiseptic wipes. I don’t think you should but if you are, here’s what you should do about it.”
