Signed-off box-ticking exercises no excuse for wrong conduct

But publication is now accepted, and of late, some fascinating cases have come to light.

FTAdviser recently drew attention to one where a woman thought she was receiving advice even though she had signed tick boxes saying her deal was execution-only. She won the case and was awarded compensation.

This suggests that the essence of the transaction and the perception of the client are paramount.

No amount of box ticking and collecting of signatures can be used as an excuse if the basis of the business conducted is wrong.

As can often be the case with Fos decisions, the adviser community divided into those exploding with outrage and those prepared to look closely at a decision and make a balanced judgement.

In this case, the woman believed she was getting advice from a pensions expert working for LP Financial Management (formerly known as Lansdown Place Financial Management).

The “expert” was in fact a Harlequin agent who had previously worked for LP. That alone makes me feel uncomfortable.

The woman was persuaded to move £65,000 from several pension schemes, including a final salary pension, to a Sipp so that she could invest £58,500 in a Harlequin property.

Now come on folks. Don’t you believe that a financial adviser has a duty of care to their client?

Isn’t handing off someone to a third party which is likely to invest their pension money in a high-risk scheme at least questionable?

So what if she did sign forms saying the deal was execution-only?

Do any of you honestly believe that she understood what that term meant and, more to the point, that she had felt she was not getting advice from an expert?

As has been pointed out on forum boards, Harlequin was offering exceedingly good commission rates on referrals.

When somebody goes to a financial adviser for help, it is imperative that they can feel secure that their money is being professionally handled and that the adviser has their best interests at heart from the minute they first make contact, right through to any transactions that are conducted or initiated by that adviser.

“When somebody goes to a financial adviser for help it is imperative that they can feel secure that their money is being professionally handled.”

As the ombudsman said: “I think it’s unlikely that Mrs H would have chosen the Sipp provider without some advice. So although Mrs H signed declarations to say that she hadn’t received advice, I don’t think that is credible.”

LP has been told to take ownership of the Harlequin investment by paying a commercial value acceptable to the pension provider. That seems rather appropriate – now they can enjoy the benefits of this investment.

FTB hopefuls should love Brexit

George Osborne recently warned that house prices could be worth up to 18 per cent less if the UK votes to leave the EU, compared with the levels if we stay.

This was relayed in shock-horror terms by certain media outlets, not least the BBC.

But wait. If I were a twenty or thirtysomething, this announcement would have me sprinting to the ballot box to cast my vote for an EU exit.

In fact, everyone except those at the very top of the housing ladder should welcome some respite from inexorably rising house prices.

This suggested to me that our chancellor has a very fragile grip on basic arithmetic and especially on the effects of percentage rises and falls.

Only those, like me – and I suspect several of you – who feel they are in the most expensive house they are ever going to own, will suffer if house prices fall.

Anyone buying for the first time or who wishes to trade up in the next two years or so should welcome falling prices.

Sadly, first there has not been a single member of any Brexit nous to leap on this. That is probably because those leading the campaigns are already sitting on their own country piles.

Bridge over troubled waters

Bridging loans have always made me nervous. They are an accident waiting to happen.

It only takes one buyer in a chain to drop out, or the housing market to stall, and the borrower can find themselves in dire straits.

So I was concerned to see that annual gross bridging lending jumped by 56 per cent in the first quarter.

The numbers are relatively small, but the trend is clear. Unregulated bridging loans still form the bulk of the market.

I am not suggesting mis-selling. I am just concerned that those taking the loans should be aware of exactly what they are getting into and the potential consequences.