OpinionJan 30 2013

Advisers selling client details must be tackled

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Money Mail’s editor James Coney received a call from a reader who had told his financial adviser he needed to get at his pension.

His adviser explained that as he was still only 53 this would not be possible. The man persisted but his adviser remained firm.

Strangely, the next day the man received two unsolicited phone calls from pension unlocking firms.

It does not take much imagination to work out how the firms got his details; the filthy lucre on offer tempted the financial adviser to divulge his client’s details. In doing so it is highly probably he breached the Data Protection Act.

This says very clearly that those who collect and hold data must not use it in ways that have unjustified adverse effects on the individuals concerned.

Advisers violating clients’ trust by selling details to a third party which could lead to ‘serious tax consequences’ is worthy of investigation

It also lays clear rules about when data can be revealed to third parties – and picking up a tasty backhander from a pension unlocking firm is not one of them.

Last week HM Revenue & Customs warned of pension unlocking schemes “potentially landing clients with serious problems down the line because pension ‘liberation’ payments are not intended by tax law and so could have serious tax consequences for both individuals and companies involved”.

Financial advisers are, of course, not the only ones to play fast and loose with their clients’ data. Insurance companies have made a practice of passing on customer details after a car accident.

They will no doubt point to the catch-all waivers many of us fail to scrutinise properly or to boxes ticked or unticked.

But can they really claim that they are acting in their customers’ interests by passing on data to accident management companies, claims managers and car hire firms?

It is certainly in their interests but all it does for the poor consumer is contribute to spiralling premiums.

The number of prosecutions made by the Information Commissioner last year can be counted on two hands – and they concern serious breaches.

But I would consider advisers violating their clients’ trust by selling their details to a third party which could lead to ‘serious tax consequences’ to be worthy of investigation.


Life policy woe

There are times when my frustration with individuals in this industry reaches boiling point.

Which adviser, in their right mind, would have put a pensioner into an investment offering up to 11 per cent income in 2005? Surely 11 per cent income should have set alarm bells ringing?