Intermediaries have voiced their anger at accountancy professionals following fresh allegations from...
Intermediaries have voiced their anger at accountancy professionals following fresh allegations from a London-based group thatIFAs cannot be trusted to give consumers the best financial advice.
Speaking at the London Society of Chartered Accountants, David Rangeley labeled financial intermediaries as "money-grabbing white-socked wide boys" and told accountancy delegates they were in a better position to give financial advice and sell financial products than anyone else.
"The expectation of clients is that the accountant will provide the steadying hand and understanding on their hopes and fears, and they will receive the right advice," says Rangeley.
"As part of our current daily work, we have to give advice at a minimum level but the FSA believes the risk to the client is also minimal so we are now on the same regulatory playing field as everyone else.
"The coming of N2 has made many accountants re-evaluate they positions and I have not doubt that some firms will be leaving this field behind to the more focused firms. But these money-grabbing white socked wide boys are making money out of your clients, and we can do it better," he continued.
IFAs and their representatives attending the conference - including DBS Financial Management who had sponsored the meeting - said they were angered and disappointed such criticism had been levelled at financial intermediaries when many firms and trade bodies had attended to build lasting business relationships with accountants.
Rangeley had been expected to deliver a controversial speech today as information provided to journalists last week from the LSCA suggested Rangeley would say chartered accountants have "higher ethical standards" than IFAs.
Today's comments were again followed by continuous cutting remarks from Ian Fletcher, of the 2020 Consulting Group, during a speech which heavily focused on the cross-selling of products to clients:
"Chartered accountants are people of trust, integrity and ethics. We are the second-most trusted profession after doctors so we have to use that. The average age of IFAs is 52 - that should say where their market is going."
He continues: "60% of life and pensions business goes to IFAs, but 60% of those people are our clients, and we are paying [the IFA] to do this business…IFAs are so smart, they get you in for lunch, they offer 30% of their commission for referrals you pass over but six months down the line, he smacks the client with a Group Personal Pension that he can't afford, you can't earn any money from it and you've lost control of the client's affairs."
Before delivering his own speech, IFA Ronnie Lymburn, director of the Income Drawdown Advisory Bureau, spoke out against the barrage of criticisms:
"I was in two minds whether to come back into this room after the break because I feared taht nailed to a cross would be the letters I.F.A.
"For the record, I am an IFA and quite proud of it. I am 58 and no longer give advice but the average age of my team of advisers is 34 and they give quality advice. The only time I wear white socks is when I play tennis or go to the gym," adds Lymburn.
Speaking to IFAonline, Howard Gross, president of the London Society of Chartered Accountants, backed his colleagues' comments by arguing that the amount of compensation chartered accountants pay each year for misselling is around £50-60 whereas the average compensation paid by IFAs is £1,000.
"The real issue here is the market is now open to competition and IFAs are worried they will lose business. Our members have some very good relationships with IFAs but if IFAs have nothing wrong then there is no need to worry about their reputations."
Further comments from trade bodies and representatives attending the conference this morning will be added as we receive them.
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Correction notice: IFAonline incorrectly named David Rangeley last week as David Rangley, and Howard Gross of the LSCA as Howard Greene of the ICAEW. We apologize for any confusion this may have caused.
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