Compliance experts urge advisers to prepare clients for market volatility

By Justin Cash

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Feb 13, 2019
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Compliance experts have urged advisers to get ahead of future volatility by preparing clients for market falls to avoid complaints. 

Speaking on a panel at Dynamic Planner’s London conference yesterday, Threesixty managing director Russell Facer said advisers should be looking closely for “Killing Eve” moments that put a twist in any period of the plan clients expected to follow.

He said: “As soon as the market gets more volatile, clients will start to complain about performance. You can’t complain about performance but they will find a way in…Are you educating clients as to the surprises along the journey?

“Planning is about the journey and where they are going to go. When you have those annual reviews, has something happened in that chapter that means they are not going to be where they think its going to be?”

Dynamic Planner proposition director Chris Jones agreed. He said: “If the client is making money, they’re going to be happy. It’s when they aren’t that’s when you get a complaint.”

Facer also warned that a potential increase to the Financial Ombudsman Services’ compensation limits – currently under consultation – could put heightened pressure on advisers and professional indemnity insurers at the same time as market falls spur more complaints from clients.

He said: “FOS was set up for people who couldn’t afford to go to the courts….When you start getting higher values, could they go to the courts?”

Sesame Bankhall Group’s head of compliance Carl Wallis said meeting new requirements for assessing ongoing suitability under Mifid II can be made easier if advisers have a clear strategy as to how they go about annual reviews and keeping their clients updated regularly.

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John 5 months ago