Rogue advisers do not represent the majority

But why is every pension adviser receiving a caning for the misdemeanours of a few?

A surge in Sipp claims is blamed for the £100m levy – three times the annual levy at the start of last year.

The root of this problem has been clearly spelled out: claims against a range of esoteric and unregulated investments that have been wrapped in Sipps.

Justifiably outraged, advisers are asking perfectly reasonable questions: How are these unauthorised schemes able to set up and operate so easily? More to the point, why are qualified financial advisers in some cases using them for clients? And what about the role of pension trustees?

But the key question is why are all advisers being asked to foot the bill when it is clearly a minority motivated by greed and sometimes investing in ignorance who are causing the problem?

If some advisers cannot be bothered to research investments before committing clients’ money to them, then the buck should stop with them. If they are putting clients into investments they do not themselves understand then they have no place in this industry.

A pivotal case last year saw Fos find in favour of an investor whose entire £29,000 pension fund had been put into Sustainable Agro Energy, an unregulated scheme selling biofuel investment products in South East Asia.

If advisers cannot be bothered to research investments before committing clients’ money to them, then the buck should stop with them

Sipp provider Berkeley Burke, which argued it was not responsible for giving advice, had, said Fos, failed to adhere to guidance published in 2009; the client’s investment was introduced by an unregulated intermediary.

There have been suggestions that perhaps pension intermediaries should fall into two categories: those who stick with regulated investments and those who push the boundaries. Hands up those who would volunteer to go into the second category.

There is a danger that the pension adviser levy could spin out of control if advisers were not prepared to stand up to clients who wish to do something potty. They must be prepared to turn away the business.

And those that do not should be made to shoulder far more of the burden, rather than spreading it among the majority of advisers who only want the best for their clients.

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Take the money and run

I have always been reluctant to write about the stock market in this column because so much can happen in the few days between when I file it and when it is published.

But I have for some time had an itching to take some profits.

We have had a terrific run, but all bull runs hit the buffers sooner or later. We private investors are constantly thrown platitudes along the lines of “it’s time, not timing”, or we are warned of the dangers of being out of the market on key days.

Every year we are reminded of the adage: “Sell in May and go away, come back on St Leger Day.”

Axa Wealth’s Adrian Lowcock informs me that from 1986 to 2013 the FTSE 100 returned minus 13.75 per cent excluding dividends between May 1 and September 30. In the autumn and winter the index has returned 185.4 per cent.

Aha. But when dividends are taken into account the summer stock market only provides negative returns a third of the time.

Then there are other concerns, such as the uncertainty over a hung parliament, which I alluded to last week.

There is the slowdown in growth – and more worryingly, the fall in construction sector activity.

My gut feeling is that after doing very well for a lengthy period it may be time for a breather. Time, as I say, to take some profits.

This may sound rather unscientific, but then science and the stock market are not bedfellows. Maths and an analytical mind both help, but so does the willingness to back a hunch.

I may miss some profits of a rising market, but rather that than see them disappear in a post-election summer correction.

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Endowing the generations

HSBC is speculating on the end of inheritance based on the results of its Future of Retirement report.

People are becoming more open to passing on money to children during their lives so they can see them enjoy it.

I suspect that many of the property-owning generation will not be passing on their money for a few years yet.

And far more people will be pensioners themselves before their parents die.

Those parents may well decide their children are very well-endowed already, so will pass money straight on to their grandchildren.

Tony Hazell writes for the Daily Mail’s Money Mail section

t.hazell@gmail.com