The co-director of Kent-based IFA Andrew Oliver & Co, said the firms, which generate client leads for advisers, should be considered part of the advice process and fall under the FCA’s regulatory remit.
He said: “What are they saying to our clients? The majority of them are untrained and unqualified and are acting on behalf of IFA firms.
“Many are no different to timeshare or double-glazing salesmen, and it makes you ask: ‘Is this the best way to promote our profession?’ Especially after advisers have worked so hard to get through the RDR?
“We have unqualified street traders acting on behalf of advisers and promising who knows what to these clients.”
Mr Oliver added that some dubious lead generation firms were also offering pension liberation services, and were charging advisers up to £200 a lead, many of which would not bear fruit.
He said that some of these firms, using lists which he suspects are provided by lead-generation firms, have cold-called him, thinking him to be a potential client, and questioned him about his ‘frozen pension’. He said this was a worrying trend, adding: “It seems that such firms care about nothing other than converting the lead”.
Mr Oliver urged advisers not to use their services: “There are lots of either desperate or greedy IFAs out there who employ these companies, and I think we are engineering our own demise by using them.”
When asked about the use of lead-generation firms, a FCA spokesman said the regulator did not have plans to regulate such firms although it took a “dim view” of cold-calling on Ucis or pensions liberation and had made its position clear on this.
He said the use of lead generation firms would fall under the FCA’s handbook rules on outsourcing, which states that [advisory] firms, when outsourcing to external companies, remains “fully responsible for discharging all of its obligations under the regulatory system”.