In a recent financial industry piece it was reported that a financial adviser from West Riding Personal Financial Solutions (WR) had ‘bagged’ his client £74,000 as compensation for his mis-sold pension.
The client in question had been advised in 1992 to transfer a defined benefit pension into a personal pension, something we know from the rules to be presumptively bad advice because in doing so you give up a guaranteed, index linked income for the rest of yours and your spouse’s lives. WR, his new advisers, picked up on this and decided to file a complaint on his behalf.
In April 2019 the regulation of claims management companies passed from the Ministry of Justice to the Financial Conduct Authority (FCA). The aim was to drive up standards of conduct and boost consumer protection.
WR, whose main course of business is providing independent financial advice in all areas of personal finance was also authorised by the FCA to deal with claims, under the new regime.
However, financial advisers have been warned by others in the industry of the very real risk that they might be caught out by regulation which could in turn affect their professional indemnity cover.
This is something we have seen first-hand.
We recently dealt with a professional negligence claim which involved similar circumstances, except our client’s adviser missed a very crucial deadline and failed to refer his claim to the Financial Ombudsman Service (FOS) in time. The result was that our client could not bring his claim against his former advisers to FOS and he lost the opportunity to obtain compensation.
We represented our client in a professional negligence claim against the adviser who conducted the claim. However, their professional indemnity insurers were clear; advising on a financial mis-selling claim was not covered under its policy. The adviser firm was therefore exposed to a substantial uninsured claim for compensation and legal costs. Thankfully this was settled before court proceedings were issued.
We recommend that anyone seeking professional advice on bringing a claim for financial mis-selling should:
- Check that the firm they are considering using is properly authorised and insured to undertake claims management activities.
- Carefully consider whether the fees your adviser or claims management company is proposing to charge are fair and reasonable. Many firms will charge a fixed percentage without undertaking an assessment of your individual claim.
- Consider using a specialist solicitor as this is likely to be cheaper than using a claims management company.
- Obtain proper advice as to funding options to ensure you are not paying over the odds.
If you are considering bringing a claim, or you are concerned about a firm’s regulation or insurance then please contact us for a free consultation with one of our specialist advisers.
We offer various methods of funding, including ‘no win, no fee’ agreements, ranging from 5% to 25% depending on the complexity and value of your individual case. We can also offer fixed fee and ‘pay as you go’ options.
We are authorised and regulated by the Solicitors Regulation Authority and fully insured for the work we undertake up to limit of £3,000,000.
Put your trust in Hugh James and come away with the compensation you deserve.
For more information, contact our Financial Mis-Selling lawyers today.