Pricing out some clients is a price worth paying for certainty in terms of ‘insistent client’ liabilities, according to Almary Green’s managing director.
In an end-of-year round-up for FTAdviser, Carl Lamb stated that his overall feeling has been that the pension freedoms have “done our sector no good at all”.
His firm took a decision early on to insist upon a fully-advised process for clients if they wanted us to handle significant pension fund withdrawals, something which of course comes at a price.
“The Financial Conduct Authority has indicated that there may be a place for insistent clients, but we have decided not to execute work on that basis.
“The result has been that, for some clients, we have priced ourselves out of providing a service to them. I’m certain this isn’t the outcome foreseen by the government when they introduced the freedoms, but we took this decision to protect both the client’s best interest and our own.”
Almary Green appears to not be alone in rejecting such pension transfers outright, with a Personal Finance Society survey of 1,884 members finding that more than 80 per cent would not set up such a transfer if they thought the process not in the best financial interest of the client.
Just 16 per cent said they would consider executing a transfer in line with Financial Conduct Authority guidelines, with only 1 per cent agreeing to do so on the basis of not wishing to turn a client away and into the unregulated advice arena.
Mr Lamb argued that escalating costs and an ever-increasing administrative burden have tipped some firms over the edge – “a trend that is likely to continue if all the forces in our industry continue to pull against each other”.
He noted that the Financial Advice Market Review is an “ideal opportunity” for the whole industry to tackle these issues “and I sincerely hope that every side is prepared to both put forward their views and listen to everyone else”.
“It will also be important to take this opportunity to make sure that increased regulation and higher costs don’t make financial advice a luxury that only the rich can afford; the future of our industry may depend on it,” opined Mr Lamb.