2012 And a less rubbish model?

It is no doubt a sign of middle-aged angst that I find more and more things to get angry about.  I am angry about the "Money Advice Service" which claims to be "free, clear and unbiased", at least suggesting that it offers an alternative to consumers to basic financial-planning services.  There's a slight unfair advantage here compared with our alternative ("fee-based, clear and unbiased"), particularly when one unearths the previous FSA invoice for periodic fees and all the other levies, and recalls that one is effectively funding this kind of competition.

And I'm angry about the compensation culture.  This (spoof!) advert (from the US) does very effectively reflect the mindless and largely unprincipled nature of much of what goes on.  Today, upon returning home, I listened with rising irritation as my wife recounted the latest telephone incursion into our home by an indian-sounding gentleman, speaking on a very bad line, who was calling us to discuss our "recent accident".  He could not tell us when it happened, how he came to know, who else was involved, what the accident constituted - nor indeed was he able to tell us the name of the firm he represented, or for that matter his own.  Sometimes I wonder about my own grip on reality, but this really took ignorance to a whole new level.  The Telephone Preference Service appears to provide little functional protection against this kind of thing, and indeed we had nothing to report back if we had felt sufficiently aggrieved to pursue the matter ('Number withheld'). 

On one level, of course, the matter is laughable.  On another level, it is rather more sinister.  We all complain about it, but it still goes on - there seems little motivation to put a stop to the thing, despite the self-evident undermining that is going on of basic human values.  Clearly, sufficient people are making substantial amounts of money out of greed and unprincipled self-interest, but I do not see a better world arriving as a result.

This week, we have seen a successful outcome when defending one of our Members against the depredations of one of the so-called 'claims management' companies.  The original complaint was so utterly baseless, and the validity of the original advice so absolutely clearcut that it was astonishing to find the matter referred to the FOS after our conclusive initial investigation.  In a rational and intelligent world we did not have many fears about the final outcome, but then again in a rational and intelligent world, the matter would not have arisen in the first place, and certainly would not have wasted the Ombudsman's time, or racked up significant time costs within our firm.

It is a sad but sobering fact that there are individuals and even organisations which are prepared to argue that white is black if they can see some pound signs attached to the end result, and such initiatives appear to have relatively few disincentives attached which might encourage a moment's sober reflection before embarking on a path of wanton opportunism.  This is the culture of Utter Rubbishness, so what can professional IFA firms do about it?

• Avoid complacency - you cannot see what goes on within the head of the client who, one minute, gives every evidence of being your Best Friend;
• Aim high all the time - and by this, I don't just mean maintaining your compliance standards at every stage in your advice process, but rather commit yourself to delivering such an excellent outcome that only the most pathologically opportunistic individual would choose a path of action calculated to deliver redress;
• Keep close to your clients - which provides less space for outside agencies to intrude in a suggestive manner ("Were you sold a blue-coloured pension??  You might be due compensation!");
• Observe the KISS formula (Keep It Simple, Stupid) - the probability of a successful complaint increases exponentially the more complicated or risky the solution you recommend.  Providing simple solutions where you have consciously minimised the number of factors beyond your control helps to reduce the number of options for the opportunist.  And it's good practice anyway.