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“Working with Josh means I feel hugely more secure about my financial future.

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“Josh has made me feel much more positive about my future

Butters Mutters – Tata is a warning to watch for predatory practices


By The Orchard Practice

When I sat down to write this month’s Butters Mutters, my heart was initially set on something to do with British Airways’ decision to – from April next year – bump the remaining 20,000 of its 37,000 staff into the company’s Defined Contribution pension scheme, as reported in last Saturday’s papers.

While the decision is noteworthy in that it throws BA employees into a riskier proposition than the final salary scheme currently housing 17,000 of the airline’s staff (which, of course, also carries the potential for more reward), within 30 seconds of coming up with my opening sentence it paled into insignificance.

My eyes had been drawn to a far more pertinent headline – both to The Orchard Practice, and you, our clients. And hopefully a bit more interesting than yet another hash out of the tired old Defined Benefit/Defined Contribution debate.

The story revolved around a low-level manager at a large corporation who is accused of taking under-the-table payments for referring colleagues to third-party representatives of a financial advice firm.

The Financial Conduct Authority says it is investigating reports of shoddy advice being given to said manager’s colleagues as a direct result of the referrals. In short, a flashback to the days when financial services tarnished their own reputations by operating churn-even-if-you-burn business models – an era most of us have worked very hard to cement firmly in the past.

Yes, referrals are the lifeblood of our industry, and commissioned referrals is a legal way of procuring business for those who choose to use it. But after all of the changes the industry has been through since the financial crisis – both enforced and voluntary – hearing that not only are some regulated firms engaging in archaic practices but clients are reportedly being disadvantaged as well, makes you wonder whether some people have a penchant for professional masochism. Not exactly flabbergasted, but still surprised nonetheless.

While you, the client, are now better-protected than ever before, the lesson here is that even with due skill, care and diligence regulations in place, there are still some who seek to circumvent the rules in order to give themselves the retirement that you have worked for.

As many of you will know, at The Orchard Practice we put every client through a stringent review process before making any recommendations on your financial planning. It is not because we enjoy it (though the geekier among us certainly do); it is because making a suitable decision for you, regardless of how it affects us as a business, is what we are here to do.

The FCA is often accused of being either overzealous or too timid, but for client-facing propositions there is no such thing as being too assiduous. In a subject as complex as financial planning it is essential that you know exactly what we are recommending, why we are doing so and how it will affect your current and future plans, and, in many cases, those of your children. This is why the FCA register exists: to keep nefarious individuals from preying on your livelihood.

However, as demonstrated by the recent referrals allegation, even tight guidelines are sometimes not enough – we need you to ensure that before taking advice you are certain that it is from the right person.