When your clients come to you in need of financial advice, it’s vital that you have a planner to hand who you know you can trust.
Whether it’s help with their pension, investments, or tax planning, you need to be confident that your clients will receive the highest quality advice that takes them, their families, and their personal circumstances into account.
You also need to be sure that the advice they receive is in their best interest, looking to help them achieve their ambitions for the future.
Unfortunately, there are many concerning stories about individuals looking for retirement advice or pension planning, only to end up losing some or all of their savings due to deliberately misleading or simply misinformed advice.
Poor advice like this is incredibly dangerous. It could be seriously detrimental to your clients’ wealth, ultimately seeing them unable to reach their financial goals and live the kind of lifestyle they want.
So, find out why this is such a concern, and how ensuring that your clients have access to “proper” advice can help.
78% of FSCS claims include an element of “poor advice”
Sadly, clients receiving poor advice is more commonplace than it should be, according to the Financial Services Compensation Scheme (FSCS).
The FSCS is a regulatory body that provides compensation to individuals in the event that a covered financial provider is unable or unlikely to be able to pay out to customers when required. This is typically up to £85,000 for each provider that a customer holds money with.
As reported by FTAdviser, the FSCS revealed figures in September that showed around 78% of claims made to the scheme included at least an element of poor financial advice.
While successful claims will have seen clients or customers receive compensation as a result, this might still have been less than their lost savings or investments.
No doubt it would be preferable for your clients to receive high-quality advice at the outset, rather than having to rely on a safety net like this that could prevent them from doing what they wanted in the future.
Your clients need “proper” advice
With more than three-quarters of FSCS claims involving bad advice in some capacity, this underlines just how important it is that your clients have access to proper advice from fully qualified and regulated financial planners.
Your clients need advice that best organises their wealth for the future, giving them the peace of mind that an expert is carefully and appropriately handling their money.
Rather than having to be concerned that their savings, investments, or pensions are at risk, your clients should expect to be treated fairly by an adviser who exclusively acts in their best interest.
In fact, the financial regulatory body in the UK, the Financial Conduct Authority (FCA), published its new “Consumer Duty” policy in July, setting new standards for how clients must be treated by anyone providing advice.
These rules will require firms to:
- Deliver good outcomes for their clients
- Act in good faith, avoid causing foreseeable harm, and enable and support customers to pursue their financial objectives
- Ensure that all consumers receive communications they can understand, products and services that both meet their needs and are of a fair value, and the support they need.
You should see these criteria as the minimum benchmark that any planner must meet for you to be willing to send clients to them.
You need to find a planner you can trust
All in all, this outlines the immense importance of you finding a financial planner that you trust and can be confident in when you recommend them to clients. Knowing exactly where to turn when your clients have these specific needs can be tricky, especially as there’s a risk of them not being treated properly if you don’t know the planner.
By working closely with a planner, you can build a professional relationship and rapport with them. This way, you can be confident that your clients will receive the treatment and service that you offer to them yourself.
For example, we ensure clients receive the highest possible care through our status as Chartered financial planners, as awarded by the Chartered Insurance Institute (CII). Chartered status is the “gold standard” of financial planning and positions our firm amongst the UK’s leading practices.
To secure Chartered status, we must demonstrate:
- The highest levels of technical knowledge through professional qualification
- A commitment to the ongoing development of our skills and knowledge
- An adherence to ethical conduct.
By working with a Chartered firm, you can be confident that you will receive the best possible advice, service, and support – removing the risk of an FSCS claim.
Get in touch
If you’d like to work with an expert financial planner who will always make decisions and suggestions with your client’s needs at heart, please speak to us at Sovereign.
Email hello@sovereign-ifa.co.uk or call 01454 416653 today to find out more.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
