Query this news article after first IFA meeting.

Langtang

We have had an initial meeting with an IFA firm. Whilst doing our due diligence, I've come upon this article.

https://www.moneymarketing.co.uk/news/pays-bad-advice-unraveling-ifa-firm-collapse/ 

Would this on it's own be enough to put you off using them?

Nebulous2

Use who? The firm concerned, or any IFA? 

bostonerimus

The crucial thing if you employ an IFA is that you should fully understand what they are recommending and doing. Personally I would never left anyone else manage my money. I don't believe that has cost me anything in returns over the years and I've saved a lot in fees, but if I am behind where I'd be with advice I'm ok with that as I know exactly where my money is and the risk that I've taken on and that's worth a lot to me.

steampowered

If I linked you to an article about negligent doctors, would that put you off going to hospital?

Would you refuse to see a lawyer if I gave you an article about a negligent solicitor? 

In any line of work there are going to be a few bad apples. It would be silly to avoid seeing an IFA because some other unrelated IFA engaged in bad behaviour.

If you need to see an IFA, you should use one. However remember that the "A" stands for "advice". You should make sure that you understand where your money is going and why - and if you are not happy, seek a second opinion. Just like how you should understand and question the treatment and advice you are given by a doctor.

Langtang

Nebulous2 said:

Use who? The firm concerned, or any IFA? 

steampowered said:

If I linked you to an article about negligent doctors, would that put you off going to hospital?
Would you refuse to see a lawyer if I gave you an article about a negligent solicitor? 

Thanks for your replies.

My apologies if my post wasn't as crystal clear as I'd hoped (thought) it would be. I'm not in the habit of posting random articles about anything/one (even Doctors) without it being linked to my personal circumstances.

For clarity, yes, this is linked to this particular company. And yes, this is the company we've had our meeting with.

Those would be some great subject headings:

Dog bites man. Should we kill all dogs.....
Man buys out of date yoghurt and dies. Should we stop eating food...
...but I guess, with 9.1k posts between you, you've probably come across such (similar, not actual. For clarity) subject headings....
It's 5am and I've just finished a 12 hour night shift. Apologies for the grumpiness....

kuratowski

The article is a sobering read.  It does seem that, however many times the regulatory framework is tightened and reformed (at ever increasing cost), somehow there are always cracks in the armour to be exploited.

If I have correctly understood the article, I gather that (1) the liabilities of the old firm have not been inherited by the new firm, and (2) the particular individual who allegedly missold investments has no involvement at the new firm.
So, in most respects, you are dealing with an unconnected firm.  Albeit one that shares (most of) its name with the collapsed firm, and, presumably many of the same people.  Assuming those people are still authorised (which you can check on the FCA register) then the regulator deems them still to be "fit and proper", i.e. they have not been found responsible for their ex-colleague's actions.  So, while you could look for another, entirely unrelated, firm of IFAs, that would probably be over cautious, albeit understandable.

It is still a very good idea to understand what you are being recommended to invest in, just as bostonerimus has said.  Assuming the adviser recommends a globally diversified portfolio, uses regulated investment vehicles such as OEICs, uses to the maximum extent possible the well-known and legitimate tax wrappers (i.e. the ones commonly discussed on this board), and uses a regulated platform, then it should be reasonably safe.  Obviously bearing in mind the risk you run in any case with investments that have the capability to fall in value.

Nebulous2

It's an old article - the comments underneath are dated 2017, and it would be interesting to know how it had panned out in the intervening years.  As said above look at the main regulated platforms, look at the thousands of options to buy funds etc which is available via them, and I can see no need for either you going direct or an IFA to be dabbling in unregulated products, unless you are a very experienced investor prepared to take risks that are difficult to quantify.

I'm often reasonably direct, and honest, so I would be inclined to have the conversation with the IFA- "I've seen this article, which raised some concerns for me, can you tell me what happened?"  It does look as though the company committed some resources to make it right, including a share of their profits going forward, and the issues related to one individual so if the answer I got was plausible it wouldn't put me off. 

[Deleted User]

Langtang said:

Nebulous2 said:

Use who? The firm concerned, or any IFA? 

steampowered said:

If I linked you to an article about negligent doctors, would that put you off going to hospital?
Would you refuse to see a lawyer if I gave you an article about a negligent solicitor? 

Dog bites man. Should we kill all dogs.....
Man buys out of date yoghurt and dies. Should we stop eating food...

Those are wildly different analogies and both poor examples of what you are talking about

Dog bites man. Should we kill all dogs?

---No obviously not, but it does raise the question about muzzle laws, dog leads, training for owners etc

Man buys out of date yoghurt and dies. Should we stop eating food...

---No obviously not, but the supplier selling out of date food should be prosecuted and take steps to prevent it happening again and I would be very careful if I shopped there to double check dates. I used to work at a major supermarket as a student, one of the training points was the normal FIFO arrangement for goods. When tidying shelves in the fridge section I noticed all the new coleslaw had been pushed in at the front by someone lazy and the back of the fridge was full of out date products which I promptly removed - but that sort of arrangement could have caused illness.

If you had a chat with CIS (Scotland) then yes, you should have consideration but part of that would be what the firm has done since 2015, a couple of years after they removed the rogue director in 2013, or even 2017 when that article came out. Are they profitable, do their investors trust them etc. Such due diligence is part and parcel of investment.

Thrugelmir

What outcome are you expecting in raising the issue? The person you deal with might have no first hand knowledge. As a consequence may come across as evasive.