Execution Only Service

We are sometimes asked if we can provide advice on a specific subject, for example the benefits of investing in gold or investing in a certain company. Or we are asked if we can just arrange a specific transaction, for example a pension transfer because that’s all that someone needs, all their other finances are in order, they just need that one thing sorting out.

The short answer is that we don’t offer this kind of “execution only” service.

The specific definition of an execution-only service according to the Financial Conduct Authority is: “A transaction executed by a firm (of Financial Advisors) upon the specific instructions of a client where the firm does not give advice on investments relating to the merits of the transaction and in relation to which the rules on assessment of appropriateness do not apply.”

The key point is that the Financial Advisor does not give advice about the investment and so doesn’t need to consider whether its appropriate. In other words, they don’t have to find out anything about the client’s circumstances.

This is the total opposite to the advised service which we offer, where we need to understand everything about your circumstances, including your aspirations and appetite to take risk, amongst other things. Only once we understand this can we begin to provide you with advice taking everything into consideration.

We call this a holistic approach to advice and it is the only service we choose to offer as Financial Experts.

By only providing this kind of holistic advice service we are confident that the advice we provide will always be in your best interests. It also enables us to secure the right levels of Professional Indemnity Insurance to protect you in the unlikely event that something goes wrong.

For example, recently the Financial Ombudsman Service has ruled that Financial Advisers can be held liable for acting on an execution only basis for clients. This has been upheld especially where advisers dealt with the execution of investments into Self Invested Pension Plans (SIPP’s) and in particular where those investments were illiquid assets – things like apartment blocks abroad, car parking spaces, storage units etc, which have gone wrong and lost money. It’s partly because of risks like this that we don’t provide an execution only service.

Insistent clients

We take a very similar view with what are sometimes known as “insistent clients”. These are clients who despite going through the holistic advice process, disagree with our recommendations and “insist” that they take a different investment decision. At that point they are effectively asking for an execution only service, which we don’t provide.

It’s important to be clear about the process here. The holistic advice and recommendation service we provide provides exactly that – an advice and recommendation service. You are under no obligation to act on that advice or the recommendations provided – it’s your money after all. But what we can’t do is implement a transaction that we don’t believe is in your best interests. That would put us at risk of being disciplined by the FCA and having t pay compensation when things went wrong in the future. If a client insisted on a course of action against our recommendations they would have to arrange that themselves without our involvement.

Help with DIY investing

We understand that many people don’t believe that they need to take financial advice and would prefer to make their own financial and investment decisions. We understand that and when its your own money you are perfectly entitled to do with it whatever you choose.

There are an increasing number of DIY investors and Wikipedia now has a page on the subject which might help.

The other place you might consider looking at for help is Martin Lewis’s Money Saving Expert website. Martin is well known through his TV appearances and provides guidance rather than advice on a number of financial topics.

As you will be aware there is a big difference between advice and guidance in financial services, with Financial Experts being qualified specialists.