There can be no caveat emptor when it comes to advice

Their argument is that the consumer knew what they were doing at the time and is now rewriting history. I’ve heard it over pensions, endowments, split capital investment trusts, PPI and precipice bonds.

Sorry it just won’t wash. You are financial advisers, you are paid to advise, not sell – and when that advice is wrong then the buck must stop with you.

The vast majority of consumers are not experts on investment and financial products. In fact a good proportion of otherwise intelligent people haven’t got a clue. That is why, in one way or another, they pay for advice.

Let’s take an analogy. If you paid a heating engineer to service your boiler and it later blew up you would hold that company liable for the damage. And rightly so. If they turned round and told you that you should have read the boiler manual and checked the work of the heating engineer, you would think they were barmy.

Yet that is precisely the argument a few in the financial world still put forward when consumers claim they were mis-sold or misled. I find it particularly unsettling when investors are sold products and it later emerges that the salesman/adviser did not fully understand what was going on.

This was obviously the case with endowment sales in the 1980s and 1990s. But we are now 20 years on, IFA education standards are higher and so should be their knowledge.

Yet if the evidence that crosses my desk is anything to go by then this still happens – though in far smaller numbers than previously.

One difficulty facing the IFA is that they themselves can be the targets of big budget marketing campaigns. If an insurance company or investment house can convince you a product is right for your clients, then their job is done. That saves them the tiresome job of convincing hundreds of thousands of individuals.

But this makes the IFA’s role all the more crucial. You are the guardians of your clients money. You hold the keys to their financial future.

So if you get it wrong, don’t try to tell me there is a place for caveat emptor. The buyer has already exercised due caution by employing an IFA. You are the expert and that buck stops with you.

Vaguely aware

Skandia research suggesting that half of people with an investment product are only vaguely aware of the risk they are taking, struck a chord with me.

This very much tallies with the response I’ve received from readers when their investments do not go to plan.

Skandia’s survey has worse news – 8 per cent of those questioned admit they had no concept of the risk they were taking whatsoever. In that case we must question why they have investments at all?