CLAIM YOUR COMPENSATION

An independent financial adviser (IFA) is a “financial expert who works on their own to provide advice and guidance to clients on financial matters and products.  They are not tied to any financial institutions, firms or products, and they work for the best interests of their client”. 

Finance Strategists

Let’s cut through some of the nonsense straight away shall we –

1. Not all IFAs are “financial experts”, many have the bare minimum in terms of qualifications that meet the criteria to advise clients.

2. Many do not “work for the best interests of their client” although they state that they do.

The cold reality of the UK IFA market is that many so called IFAs –

• Use platforms to make their life easier.

• Charge ongoing advice fees without providing any meaningful ongoing advice.

• Are building an “asset base” of other people’s investment funds from which they derive their income.  This is known as “assets under management” or AUM.

• Are building AUM because they are looking to sell this when they retire for a multiple of the income derived from it.

• As a result of the above are certainly not “working in the best interests of their client” – they are in fact working to feather their own nests and to ultimately sell their client book to the highest bidder.

How do I know? because I was an IFA for over 20 years up to 2015 and I did exactly that.  The market is still the same now, if not considerably worse. 

St James’s Place is the UKs largest provider of “independent” financial advice.  This year it put aside over £450M to pay compensation to clients who have not received the correct servicing or advice in relation to the investments sold to them by their St James’s Place adviser.

St James’s Place is a “tied agent” and this means that advisers working for them (they call themselves “partners”) can only advise on the relatively small panel of investment type (ISAs, pension etc) at their disposal.  If a client has a requirement for a particular investment that is not on the panel, the St James’s Place partner can advise the client to use the one which “closest meets his/her needs”.

It gets worse.  The business model of St James’s Place is to guarantee to “buy back” clients of a St James’s Place “Partner” at a multiple of its ongoing fees after a period.  Therefore, the entire business model is flawed in terms of providing “independent financial advice working in the best interests of clients” simply because the model encourages its partners to advice its clients to advise investors to invest in St James’s Place products, many of which tie the investor in for 5 years, even if that product does not best meet the clients’ investment needs.

I need not go on, a simple google search will provide all the information that a potential investor needs in relation to why not to invest with a St James’s Place “partner”.

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