Intrusion overdrive

Financial Adviser

A new study by Legg Mason just out reveals that most (97 per cent) investors who use the services of a financial adviser believe advisers take time to get to know their clients’ financial situation and goals.

Coming at the very point when the ill-thought out mortgage market review kicks in, it is a much needed vote of confidence in financial advisers by their clients.

It also comes at a time when Selftrade, a rather bullish stockbroker, is reported to have been taking its clients, including stocks and shares Isa holders, through a wringing machine. If these reports are correct, the intrusive and aggressive, even threatening, nature of the questioning by Selftrade, presumably as part of its know your customer principle and precautionary approach to money laundering, takes the intrusion to a new level.

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According to the report in a national Sunday newspaper, the questionnaire sent by Selftrade to its customers asked: how much of their total wealth was derived from employment, and, if from previous employment, asked them to provide details of the previous employer.

They also asked for details of the amount involved and timescales. It goes on to ask if any of the client’s wealth has been derived from inheritance, if so how much and when. It asked them to name the settlor or deceased and how did the settlor come by their wealth.

Then it asked if any of the client’s wealth came from selling assets or legal entities, if so describe them and the extent of ownership. And, it goes on, but you get the drift.

It is clear that Selftrade has done this for all the right reasons, including complying with regulations, but whatever the reasons, we have warned before that the intrusion has gone beyond what is right and proper in an open democratic society. If fact, on first appearance, the Selftrade interrogation goes far beyond what is required by HMRC and, it appears it has removed any limitation on the dredging of such person details.

Although the fight against money laundering is a worthy one, there comes a point when the intrusion has to stop.

It is not a point of having something to hide, it is one of why does the state or a private company want to know so much about citizens.