Adviser fined £1.3m after pension transfer failures

[Deleted User]

Quack views are  shared by many people indeed. The fact it’s based on religion/superstition is interesting but not helpful to making a logical argument.  He is specifically opposed to “shareholder capitalism”. Interesting theory, of course.  Lots of experimental data from countries with and without capitalism. The evidence is overwhelming. Its Ok to have quack views but does raise question about  the university that gives him platform 

hugheskevi

Deleted_User said:

Yep. One man advising you something is just that, whatever letters he has. He is not the decision maker. That would be you.  You are responsible for the due diligence on the advisor and for the ultimate decision. 

And the advisor had a massive incentive to provide the advice with a certain slant. As part of due diligence you need to understand incentives. If its an important decision (like the livelihood of your family), you need to make sure you listen to more than one source of information and know enough about the subject to fully understand whats behind the advice.  

100% agree with this, and the principle goes well beyond financial decisions.

Many years ago I had a free consultation with an orthodontist from my dentist (I know nothing about dentistry). The recommendation was a long dental procedure along with surgery and teeth extractions. Given the significance of the decision, I consulted guidelines on what the consultation should have covered, and it was clear that quite a few things which should have been included were not done.

Given the possibly flawed consultation, I sought a second opinion from another specialist independent of the first one whom I researched and contacted myself, this time paying for their time (an arrangement I much prefer). They not only recommended a procedure lasting only 6 months and costing far less, they were also able to explain why the treatment the other specialist recommended would have been harmful and not given a good outcome.

Diplodicus

hugheskevi said:

Deleted_User said:

Yep. One man advising you something is just that, whatever letters he has. He is not the decision maker. That would be you.  You are responsible for the due diligence on the advisor and for the ultimate decision. 

And the advisor had a massive incentive to provide the advice with a certain slant. As part of due diligence you need to understand incentives. If its an important decision (like the livelihood of your family), you need to make sure you listen to more than one source of information and know enough about the subject to fully understand whats behind the advice.  

100% agree with this, and the principle goes well beyond financial decisions.

Many years ago I had a free consultation with an orthodontist from my dentist (I know nothing about dentistry). The recommendation was a long dental procedure along with surgery and teeth extractions. Given the significance of the decision, I consulted guidelines on what the consultation should have covered, and it was clear that quite a few things which should have been included were not done.

Given the possibly flawed consultation, I sought a second opinion from another specialist independent of the first one whom I researched and contacted myself, this time paying for their time (an arrangement I much prefer). They not only recommended a procedure lasting only 6 months and costing far less, they were also able to explain why the treatment the other specialist recommended would have been harmful and not given a good outcome.

I think the average person's sympathy in this case is with people gulled out of their British Steel pensions by greedy (I)FAs.. 

But I am 100% for freedom and responsibility resting with the individual. 

To adapt a phrase, Advisers advise, clients decide.

Thrugelmir

Deleted_User said:

 Its Ok to have quack views but does raise question about  the university that gives him platform 

The "Alternative Sage" have a far broader underlying agenda when one looks into their personal views and opinions. As respected academics they manage to receive huge amounts of media airtime. 

woolly_wombat

Deleted_User said:

Quack views are  shared by many people indeed. The fact it’s based on religion/superstition is interesting but not helpful to making a logical argument.  He is specifically opposed to “shareholder capitalism”. Interesting theory, of course.  Lots of experimental data from countries with and without capitalism. The evidence is overwhelming. Its Ok to have quack views but does raise question about  the university that gives him platform 

A somewhat dismissive view of a qualified Chartered Accountant who worked for KPMG and who also happens to have a PhD from the London School of Economics.

You can’t get much more ‘A’ list than that.

[Deleted User]

hugheskevi said:

Deleted_User said:

Yep. One man advising you something is just that, whatever letters he has. He is not the decision maker. That would be you.  You are responsible for the due diligence on the advisor and for the ultimate decision. 

And the advisor had a massive incentive to provide the advice with a certain slant. As part of due diligence you need to understand incentives. If its an important decision (like the livelihood of your family), you need to make sure you listen to more than one source of information and know enough about the subject to fully understand whats behind the advice.  

100% agree with this, and the principle goes well beyond financial decisions.

Many years ago I had a free consultation with an orthodontist from my dentist (I know nothing about dentistry). The recommendation was a long dental procedure along with surgery and teeth extractions. Given the significance of the decision, I consulted guidelines on what the consultation should have covered, and it was clear that quite a few things which should have been included were not done.

Given the possibly flawed consultation, I sought a second opinion from another specialist independent of the first one whom I researched and contacted myself, this time paying for their time (an arrangement I much prefer). They not only recommended a procedure lasting only 6 months and costing far less, they were also able to explain why the treatment the other specialist recommended would have been harmful and not given a good outcome.

Freakanomics quoted a study on doctors which showed how recommendations for eye surgery change in a statistically significant manner  depending on incentives.

Part of the issue  with each new regulation is that it gives people false impression that someone else is responsible for their decisions.  There is always a way around regulations. Each one introduces the next level of problems.  

Diplodicus

Deleted_User said:

hugheskevi said:

Deleted_User said:

Yep. One man advising you something is just that, whatever letters he has. He is not the decision maker. That would be you.  You are responsible for the due diligence on the advisor and for the ultimate decision. 

And the advisor had a massive incentive to provide the advice with a certain slant. As part of due diligence you need to understand incentives. If its an important decision (like the livelihood of your family), you need to make sure you listen to more than one source of information and know enough about the subject to fully understand whats behind the advice.  

100% agree with this, and the principle goes well beyond financial decisions.

Many years ago I had a free consultation with an orthodontist from my dentist (I know nothing about dentistry). The recommendation was a long dental procedure along with surgery and teeth extractions. Given the significance of the decision, I consulted guidelines on what the consultation should have covered, and it was clear that quite a few things which should have been included were not done.

Given the possibly flawed consultation, I sought a second opinion from another specialist independent of the first one whom I researched and contacted myself, this time paying for their time (an arrangement I much prefer). They not only recommended a procedure lasting only 6 months and costing far less, they were also able to explain why the treatment the other specialist recommended would have been harmful and not given a good outcome.

Freakanomics quoted a study on doctors which showed how recommendations for eye surgery change in a statistically significant manner  depending on incentives.

Part of the issue  with each new regulation is that it gives people false impression that someone else is responsible for their decisions.  There is always a way around regulations. Each one introduces the next level of problems.  

Yes. 

To bring it back to the theme of the thread (I)FAs are supposed to assay a potential DB pension transfer from the pov of the client.

But if that were strictly adhered to - to state the obvious - the FCA would not have had to ban contingency charging.

Point?

Thrugelmir

woolly_wombat said:

Deleted_User said:

Quack views are  shared by many people indeed. The fact it’s based on religion/superstition is interesting but not helpful to making a logical argument.  He is specifically opposed to “shareholder capitalism”. Interesting theory, of course.  Lots of experimental data from countries with and without capitalism. The evidence is overwhelming. Its Ok to have quack views but does raise question about  the university that gives him platform 

A somewhat dismissive view of a qualified Chartered Accountant who worked for KPMG and who also happens to have a PhD from the London School of Economics.

You can’t get much more ‘A’ list than that.

Many years ago the group's auditors were the same team that performed the Tesco audit. The partner involved remained the same for 5 years. At the conclusion of the last audit clearance meeting he told us that he was withdrawing from corporate life and becoming a clergyman. Never judge a book by it's cover. 

HappyHarry

.

Diplodicus said:
the expectation that the IFA will act against their own interests - is completely deranged

What a strange, and ill-informed comment.

As an IFA, I charge a client a fee to do some work. It is in my best interest to charge a fee as I do not receive recompense from anywhere else.

In return for that fee, I will do the best work I can for my client.

I can't imagine a situation  where I would act against my client's best interest. They either pay me a fee or not. Why would I do something that is not in my client's best interest? I don't earn more for doing so.

dunstonh

I think the average person's sympathy in this case is with people gulled out of their British Steel pensions by greedy (I)FAs.. 

Although it's worth noting that this adviser was doing what people wanted.  So, a good number of these people are going to be in a position that they got what they wanted and are still going to get compensation on top of that.