How would you feel if your mum found out about this? That is a pretty good starting point for most moral dilemmas in life and, I would say, it equally applies in business. Would you be happy to explain this to your dear old mother, and what would she say?
That is the thought that comes to mind the more the advice given on some defined benefit pension transfers seems to unwind.
Last week, the Financial Times revealed that 30 individuals and companies were being probed for poor pension transfer advice, while a further 15 had action taken against them for misconduct.
I know what you are going to say: this is just a few rotten eggs. You may well be right.
Plus it was inevitable that a combination of high transfer values from a couple of years ago and the pension freedoms were going to be a breeding ground for the unscrupulous.
But since 2015 we have seen more than 200,000 savers opt to exchange DB pensions for a cash lump sum – even a sense check of that suggests this seems high, given that as a rule of thumb it is usually unsuitable rather than suitable.
So let us ask ourselves, what would mum say?
To start with you have to ask yourself about the landscape that allows this to happen, and by that I mean contingent charging.
Sit down and explain this: an adviser gets nothing if they advise someone to do what is usually the right thing and not switch their pension, but they pocket a whopping great fee if they persuade them to do what is often the wrong thing and move it. Oh, and that fee gets bigger the more they convince them to take.
Now advisers cannot tell me in the real world that passes any kind of sanity check.
Some people are crooks, but sometimes bad incentives drive bad behaviour. Just look at packaged bank accounts and payment protection insurance, the sale of which were both driven by poor remuneration schemes for staff.
So no, contingent charging does not look good. It remains a mystery to me why the Financial Conduct Authority walked away from stiffer analysis of it when it undertook a market review.
Then you have to ask whether you knew this surge was inevitable. And the answer again is, of course you did, so what did you do about it?
For most, the answer is not a lot. And here lies the fundamental problem at the heart of the advice community – they are rarely prepared to call out bad behaviour.
So many times I have heard advisers privately bemoan the tactics and charges of one giant company or another, or have told how they refused to sell one product because they knew it looked bad while watching on in horror as others did, but they never did anything about it when it happened.
If independent advice is the gold standard of financial planning, then advisers are beholden to be the guardians of quality.