Speaking at FTAdviser’s Retirement Freedoms Forum yesterday afternoon (24 February), he answered Steve Webb’s earlier question by stating that if advisers have done their job properly and the customer has understood the risks, then that is what they will be judged on at any time in the future, with the at-retirement reforms not changing that point.
Earlier during the same event, Mr Webb had diverted similar questions to the FCA, stating that there is always risk of regulatory hindsight and it would be worth having evidence of current policy on tape to use as evidence if customers blame advisers for problems further down the line.
Mr Webb said: “In terms of people who get the wrong outcome, make the wrong choices, and look back and wants someone to blame, the first thing I would do is when you’ve got David Geale later today simply ask him your question: ‘What do I have to do in X months or years time when someone comes back and says ‘it all went horribly wrong I want someone to blame’ they don’t blame you?’.”
Mr Geale’s response spurred several questions from IFAs in the audience, one of which said that while he loved his job, it was “frightening” that it would be impossible to ever leave it with confidence over retrospection.
Mr Geale replied by referring to a recent summary of feedback on the subject, which did not find any examples of it applying its rules retrospectively, the regulator has changed its mind in some instances.
He reiterated that if a product sale is made on the rules of the day, then there should be no problem, but where the regulator has had to intervene there have always been corners cut.
Another adviser said his biggest worry was that customers can always make a complaint to the Financial Ombudsman Service, with the FCA’s part in these cases described as “like a referee turning up at half time” and adding that “we always seem to pay the price”.
Mr Geale stated that the City watchdog works closely with the Fos and again they have struggled to find any cases that “looked strange”.
David Trenner, technical director of Intelligent Pensions, complained that streamlined suitability reports mean that the Fos pick up on everything that is omitted, adding that they employ people without the capability to make unbiased decisions, especially since “Fos turned from being an arbitrator to a people’s champion”.
Again, Mr Geale said that if a client has been explained the risks and products were sold in the right way, advisers should not have a problem. “Things only arise when the explanation has not been done properly,” he added.
Away from the debate, he also mentioned that the FCA will shortly publish a discussion paper on disclosure material, encouraging the industry to do things differently to help get people engaged.
Mr Geale cited the example of a bank the regulator had recently worked with that managed to get a suitability document down from around 50 pages to one side of A4 paper, as well as the possibility of using videos to get the information across in a form which customers would actually take in.
peter.walker@ft.com
