Advisers told not to deal with insistent clients

Financial-consultants
Financial-consultants

Article by Phil

In the current Professional Indemnity Insurance (PII) environment, where cover is becomingly increasingly hard to get and more and more expensive, advisers are being told that many insurers will not provide cover for insistent clients.
This has always been Christina’s view anyway. She’s always only been prepared to deal with clients who want to accept her advice and recommendations after going through the end to end fact find process. Independent Financial Advisers are highly qualified professionals and it makes no sense working with a client who is not prepared to take your professional advice and wants you to do something that you would not recommend.
This is one type of so called “insistent” client. The other type is one who asks an adviser to execute transaction, an investment, or a pension transfer for example without receiving any advice, because it’s what they want to do. Again, this is something Christina has never and would never do. It is simply not in any client’s best interests not to take advice in the first place.
So, we are not surprised that PII Insurers are starting to take a harder line on cover for insistent clients, but in our view it’s something they should have been doing for years, not just now. The Financial Ombudsman Service has also held this view for many years now. If you advise a client not to transfer a pension for example, allow them to disagree with you and then facilitate the pension transfer, you would quite rightly be held responsible if that put the client in a worse position.

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