I have seen a lot of "blame culture" develop in financial services over the years, to the point where I thought I had seen it all. How stupid of me to think that.
This last week I was shown a complaint that a client had recently made against his IFA solely on the basis of service and contact.
The client was a technology investor, who had put large amounts of money into technology funds in 2000, so I’m sure you can imagine how much he lost. But, what was really interesting was the fact that he did not dispute the advice for one minute, he was clear that he had accepted all the risks and that he had been fully aware of what he was doing.
His point was the fact that the IFA had not contacted him for the last seven years to advise him, and on that basis he felt he had a claim because his investment had not been reviewed and re-allocated.
Perhaps this is valid because it is very true to say that a client who sold technology five years ago and bought UK Equity Income would by now have recovered their investment.
Now, many advisers have not contacted technology investors, either because they are embarrassed to do so or more worryingly because they don’t have structured review systems in place. In fact many IFAs still only see clients if there is going to be further business involved.
Under Treating Customers Fairly (TCF) this whole service thing will come to the forefront of the IFA proposition, which in itself is a good thing because it will get rid of the “crash & burn” approach of some advisory firms.
Going back to this particular client, he had complained about his IFA because he had paid over £4,000 commission and never seen the firm again! You can kind of see his point really.
The message here is clear for the older, longer established IFA firms with legacy/transactional clients……. “Shape up or suffer the consequences!”
Those IFA firms with masses of dormant files in the basement need to address the issue now. Failure to structure client reviews, inform clients of “what they can expect” or simply put technology in place to facilitate client contact will cost these firms very dearly in future under TCF.
Adrian Shandley is managing director of Premier Wealth Management.
The views expressed are those of the author and not those of the company he represents.IFAonline
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