New Model Adviser - For professional financial planners

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.
6419.15 + 19 0.3% 04:35

IFA to blow whistle on adviser who churned client

43 comments
IFA to blow whistle on adviser who churned client

An IFA is planning to blow the whistle to the Financial Services Authority (FSA) about a West Sussex-based adviser who cost his client over £200,000 through poor advice.

John Kelly, partner at Shoreham-by-Sea-based Square One Financial Planning, discovered the adviser had churned his client, now in their 60s, through a number of life assurance bonds.

The client’s claim was upheld by the Financial Ombudsman Service this year, and the adviser and insurance companies paid out a total of £217,816.

Kelly said he would blow the whistle because he believed the adviser’s conduct was detrimental to the reputation of the profession. 

‘If our industry is to be seen as a profession, this should have been stopped,’ he said.

‘This [adviser] is the kind of person who puts our profession into disrepute. I will go to the FSA about this.’

From 2004 to 2007 the client was advised to surrender five bonds, incurring early exit penalties, to invest in other bonds that were unsuitable.

An example of this was advice given to surrender a Prudential bond and a Legal & General bond, accruing an exit penalty of around £5,000. The fund switch did not match the client’s risk profile.

The Ombudsman dealt with the matter in the form of five separate claims, so that the total redress amount could be allowed to exceed the per claim limit of £100,000.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.