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Home > Opinion > Dennis Hall

History of easy redress wins proves case for qualifications

Many of mis-selling scandals have resulted through advisers operating in blissful ignorance of potential problems.

By Dennis Hall | Published Sep 12, 2012 | Your Industry | comments

I have recently commented on things such as qualifications, mis-selling and the Financial Services Compensation Scheme, and it has generated a number of comments in reply. Clearly not everyone agrees with my views, and a common response is that higher qualifications do not stop people mis-selling. Well that might be true, though I am not totally convinced it would not have some influence.

From time to time I am asked to help get redress for clients who have suffered through incompetence or greed. Often it has been a combination of the two. Obtaining redress is not a significant part of my work so I ensure that I pick my fights carefully. I want to win.

I recently took on another case on behalf of someone introduced to me. As with all the other cases I have handled, this will be easy pickings. Cases typically have regulatory and procedural failings I have been able to exploit, or the advice simply has not held water. I do feel that if people had worked a bit harder on their qualifications it would make my job harder.

I cannot believe just how easy it has been to pick apart the contents of a suitability letter, or a subsequent letter rejecting a client’s complaint

You see, I cannot believe just how easy it has been to pick apart the contents of a suitability letter, or a subsequent letter rejecting a client’s complaint. These cases always end up with the Financial Ombudsman Service and to date I have won every one. Despite it being a long and drawn-out process, it has never been difficult or intellectually challenging. By having a decent knowledge of regulation and procedure I have even been able to get complaints reviewed that have been rejected (wrongly) by the Fos (on two occasions in fact). In other instances I have used technical knowledge to pick away at the other side’s argument.

My point is this: could it be possible that by having up-to-date knowledge, at a higher level, advisers would take better care about how they constructed and subsequently justified their advice? And if they were constructing and justifying their advice better, might they decide that some of the things they were recommending were simply not worth it?

Let us face it, many of the biggest mis-selling scandals have resulted through advisers operating in blissful ignorance of the potential problems. Yes, there are other factors and the regulator, along with the government, has contributed to mis-selling as much as the financial services industry. But no one pretends that the regulator or the government really know what they are talking about – do they?

Last year I was an ‘expert witness’ in a case where an adviser had recommended clients to invest more than half their money into a single ‘esoteric’ asset class. I am sure the story sounded good, but there is no textbook that I am aware of that would have supported this strategy. So we picked the advice apart and supported this with extracts from the old financial planning certificate course book, the exam the adviser had once taken but never revisited. End of story. Literally.

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