Subjectivity in dealing with insistent clients poses a real challenge for advisers, experts have warned.
Speaking on the latest FTAdviser Podcast Ian Browne, retirement expert at Old Mutual Wealth, warned insistent customers – who want to take a different course of action from the one recommended by their adviser – were a real risk for an advice firm.
He said: “It is a real challenge to get to grips with why are they insisting, why are they really pushing, it is a really difficult topic to manage.”
Data published by the Financial Conduct Authority in June showed that almost 10,000 customers who were advised against transferring out of their defined benefit pension scheme ended up doing so on an insistent basis.
In April experts warned that financial advisers should refuse to deal with insistent clients, as they won’t have a lot of protection if their cases reach the Financial Ombudsman Service.
Paul Stocks, financial services director at Dobson & Hodge, who was also appearing on the podcast, noted that the FCA’s definition of what is an insistent client was clear.
He said: “Where the subtleties can lie is what is being insisted on and what isn't - is it the transfer, or is it the underlying investments, or is it something else.
“One of the biggest dangers is all the potential issues are being put into one melting pot being looked at, whereas there are a lot of different layers in financial advice.”
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maria.espadinha@ft.com
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