Tony HazellOct 6 2016

Adviser honesty is vital for client trust

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What sort of standards can the financial advice world claim to hold itself to when it harbours so many who are ready to mislead potential clients?

Consumers considering using an adviser are being duped from the minute they consider making contact by those who lay claim to accreditations they do not hold. This deception appears to be widespread with fewer than half of the 240 advisers who claimed on the Money Advice Service Adviser Directory to have credentials from Later Life Academy, ISO 22222 and Certified actually holding them.

The number rose to 85 per cent in the case of the Later Life Academy so older investors would seem to be particular targets of this deceit.

This cannot be laid at the door of the Mas, because a study of Unbiased listings earlier this year uncovered similar problems.

It seems some have allowed the accreditation to lapse, but still lay claim to it. That may be a result of lack of organisation (not a good quality in a financial adviser I would suggest) or lack of interest (an equally poor quality).

Some were in the process of attaining the qualification. 

Based on this I wonder whether any of you would like to be treated by my niece next time you fall ill. She wants to be a doctor, but is not quite there yet.  She is still at school, but she is in the process of obtaining her biology GCSE so is only a few years away.

Mas has pulled all ISO22222 credentials from its website because Standards International complained. It is good to hear that someone is on the ball.

You may feel this is a storm in a tea cup, but I beg to differ. Claiming qualifications you do not actually hold is a serious business. At heart it is a fraudulent practice. It is tantamount to attempting to get people to trust you to manage potentially large quantities of their money and to pay you a fee for doing so based on false claims.

The basis of a healthy relationship between an adviser and their client must be trust. But those falsely claiming to hold accreditations are abusing that trust and their reputation even before the client picks up the phone or walks through the door.

 

Car insurance

My car insurance quote has recently come through with a huge 52 per cent increase.

When I called, the person I spoke to told me insurance premium tax had increased from 6 per cent to 10 per cent.

So is this how it is to be? Are insurers really planning to use a four percentage point rise in insurance premium tax to justify high increases?

I pointed out that while this might account for about £15 of the £427 increase on my multi-car policy it did not did not explain the other £412.

Car insurance inflation is about 14 per cent this year so perhaps my 52 per cent rise was punishment for being an uncomplaining loyal customer.

You may recall someone dented my car a couple of months ago while it was sitting outside my house while I was wandering around in my dressing gown (inside the house I hasten to add).

The operator then suggested this will have affected my premium – and knowing the insurance industry I have little doubt that it has.

But it highlights the broader issue of how insurance companies attempt to lay the blame for their massive premium increases at everyone’s door except their own. They blame compensation claims. Yet within days of my car being hit I received a call about personal injury claims. Who passed my details on I wonder?

There was also the matter of my car unnecessarily sitting in a garage for weeks while I had a hire car.

The whole business of handling accidents appears to be mis-run by insurers. The only thing they appear to be good at is raising premiums.

 

Property as a pension

As new figures suggest, pensioners are sitting on £1trn of housing stock so the Equity Release Council tells us that lending has risen 28 per cent year on year. The £908m lent in the first half of this year was £198m more than in the first half of 2015.

Moneyfacts tells us the range of equity release products has increased by 34 per cent year on year and has more than doubled on three years ago.

For some it would appear the idea that ‘my property will be my pension’ is becoming a reality. And those hoping for an inheritance to sort out their wobbly finances may well be disappointed.

Tony Hazell writes for the Daily Mail’s Money Mail section. t.hazell@gmail.com