PlatformsOct 16 2019

Your Shout: Letters to the editor

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With regards to the article about advisers being urged to self-insure (October 3): The only issue with self-insuring is that you are then excluded from undertaking ongoing advice in relation to defined benefit pension schemes.

During a recent Financial Conduct Authority visit we were informed that we could self-insure our back book, but, as our professional indemnity insurer had limited the cover on DB work to £500,000 and not provided the full £1.25m purely in relation to DB advice, that we would have to vary our permissions and relinquish DB activity.

We have had zero complaints ever on anything. And only 23 per cent of cases advised on were advised to transfer from DB scheme and the cases checked, pre-visit by the FCA were passed without comment. Yet we are now being prohibited from being able to provide a full service to our clients.

The actions by the PI insurers and the FCA’s clear intention to close down this sector will limit clients ability to access quality advice. 

Ironically, we know of companies where DB transfers account for 100 per cent of their work who are still operating and have not been visited by the FCA. 

DB transfers were less than 10 per cent of our business so we are clearly in business for the long term. We have never accepted execution-only or insistent client work and will not close in the future leaving everything with the Financial Services Compensation Scheme – so where should the priority be with the FCA?

Darren Wakefield

 

Govt ‘deluded’ on PI cover 

I wonder how many companies would agree with the government that PI insurance works well for the majority of companies. 

PII is invariably expensive. Too often the insurers impose exclusions or repudiate claims for one reason or another. If you do make a claim or even the suggestion of a potential claim, you may find it much harder or even impossible to get cover in a subsequent year. What is guaranteed is a higher premium.

These plans are for disaster cover and once the disaster has been dealt with it is doubtful if the company would continue anyway.

If this is what our government thinks works well they are deluded as with so much else.

Harry Katz 

HA7 Consulting

 

One platform is plenty 

Rory Percival is quite adamant that using one particular platform is just “not on” and he “doesn’t care what the reasons are that a firm may just use one platform, and neither does the FCA”, which is all well and good coming from a non-IFA. But often, the reality is that as a client-centric company, the IFA might prefer one platform for their clients because, in their opinion, it does offer the best solution for the client.

If I were to prefer a platform because, after research, I felt it offered the most reasonable costs, fund choice, product choice and service, along with strong financial stability, then what motivation do I have for not recommending that platform to a client, just because the FCA feels it does not like me using one singular platform?

If I believe the platform in question is right for a client with million pounds of investment, for example, why should I discriminate against a client with a couple of thousand?

Surely, if I do the job of researching my clients’ needs and feel one particular platform provides the most viable solution, where is the harm?

To be fair, our company uses more than one platform, but only because our first choice does not offer a particular product.

Name and address supplied

Pension age injustice

The [state pension age] ruling is a complete travesty. No one looked at the reason for the differential in the first place. It was introduced in 1940 for men.

• A brief history: 1925 – age 65. 

In 1925, a new kind of pension was introduced based on contributions paid at work by employer and employee. It was paid from age 65 without a means-test. A married couple’s rate of pension was paid if both spouses were aged 65 or more. That meant many men had to wait for some time after they reached 65 to get the higher rate for their wives. 

• 1940 – men age 65, women age 60.

In 1940, the pension age for women was cut to 60 to try to ensure for most couples that the married rate would be paid as soon as the husband reached 65.

How many women were in parliament then?

Campaign group Women Against State Pension Injustice has never challenged equalisation, but the ridiculous and totally unfair way it was implemented. 

Men had on average 7.6 years notice of a one year rise, while women had 2.3 years notice (if any) for up to 6 years added to their state pension age... is that fair or just ?

Bridget Green

 

Norton refutes Percival comment

Paradigm Norton was disheartened to hear the comments from Rory Percival at the Chartered Institute for Securities & Investment conference on September 30. 

Mr Percival has contributed a great deal over the years to educate the FCA around financial planning and to bring clarity and common sense to the profession about FCA rulings, for which we are very appreciative. 

However, we do feel that his comments reported must be refuted. Perhaps he has had the misfortune to experience companies who do not have their clients’ best interests at the core of their business model? 

Client loyalty is the true output to the long-term success of any company, and they will only remain clients if they believe their interests and values are reflected in the service provided. If the interests of our clients were not at the centre of what we do, it is hard to see how they could remain so loyal and satisfied.

Barry Homer

Paradigm Norton