Checking the suitability of advice after it is delivered is akin to "putting the cart before the horse", IFA Nick Bamford says.
The chief executive of Informed Choice says agreeing with colleagues what advice should "look like" up front will not only avoid poor or unsuitable advice but also drive risk out of the business.
His remarks follow research suggesting firms are checking more of the cases written by their advisers. More than 40% say they are now combing through at least half of new business.
Bamford says: "Why is advice to the client being checked after it has been delivered to the client rather than before? Surely the old, broken model of advisers being allowed to formulate and deliver advice, then justify it, is redundant.
"I completely fail to see why the process should not be reversed with all advice to clients being formulated by all those in the firm with the relevant skills, experience and qualifications, and then presented to the client.
"To carry out a client file check post the advice being delivered strikes me as putting the cart before the horse."
Bamford, who runs Informed Choice with his son and company managing director Martin, says all advice at his firm is subject to a ‘case conference'.
"We all get together and decide what the advice is going to look like," he says. "Everyone must agree. Not only is this better for the client, but it also removes the conflict for the adviser should a problem arise.
"How we [advisers] approach this should be about getting it right first time rather than uncovering poor advice after the event."
IFA firms are checking more business written by their advisers as the twin pressures of the economy and increased regulation hit the industry.
Four out of ten (42%) members of the Professional Adviser panel said they are now combing through the details of more than half of the business that comes through the door. Half of members said they are checking at least a quarter of new business.
The issue hit the headlines last month after the FSA fined the director of a Cornwall-based IFA £17,500 for failing to tell the FSA about an employee's suspect methods and ethics.
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