Remedy for poor advice
Thank you for your article ‘FCA’s DB advice warning signals complaint rise’ (June 10). I enjoyed it very much and as an IFA I thought it was well balanced and did not portray IFAs in the worst light possible.
I was disappointed to read that the regulator is approaching 7,700 former British Steel pension members and asking them to revisit the advice that they received.
This is exactly the situation that causes me most concern and disappointment, and why I would never recommend financial services as a career.
As you say in your article, clients should be able to complain, especially where poor or inappropriate advice has been given.
However, the current system of complaints is without cost to the client, and for those who the Financial Ombudsman Service finds in favour of simply means getting additional money.
I recently had a conversation with a good friend’s father-in-law, who said that the transfer of one of his final salary pensions was the best thing he had done – flexible access to pension and outside of his estate for inheritance tax purposes and that he was intending to leave it to the children. He then confirmed he had in the past complained and been paid compensation.
Where final salary transfers are concerned, I believe that the answer to poor advice is simple. Where the advice is found to be unsuitable, the member should be transferred back into the final salary pension or transferred to an annuity that guarantees the benefits that they would have got from the final salary pension.
Ideally, the final salary pension scheme trustees would be made to accept the transfer back.
I wonder how many clients would change their minds about complaining when told that they would, if successful, not get more cash but be transferred back to the final salary pension, losing the flexibility, death benefits, etc?
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Woodford blame game
Regarding your article ‘What has the FCA been doing about Woodford?’ (June 3). I make no bones, I’m a great admirer of Jeff Prestridge, but on this occasion I think he may be a little off-beam.
The blame game often misses some important points. First, any decent adviser should look at what is in the fund. There is plenty of analysis around, not least annual and half-yearly reports.
Why did anyone not bother to look? If they had done so they may well have seen some of the higher-risk holdings.
Most importantly, much of the success of the Woodford funds was down to the hype.
I invested about 1.5 per cent of my portfolio in the fund. I knew it was high risk, but I thought it had long-term potential.