FT Adviser (26/07/2019) – Some advisers have dropped clients because they refused to stay within their agreed budget in drawdown, according to Platforum.
In its report, The evolving advised retirement landscape 2019, published yesterday (July 25), the research company found advisers were refusing to deal with clients who are not able to stay within budget.
The report stated: “A few advisers told us they effectively have to police clients’ expenditure to ensure they don’t run out of money – even terminating relationships with obstinate clients who refuse to stay within budget.”
Alan Chan, director and chartered financial planner at IFS Wealth & Pensions, said he empathised with advisers facing this problem.
Mr Chan said: “If some clients are spending well above their agreed amounts, not one-offs but every single year, then it will severely hamper the sustainability of that income. It leaves the adviser between a rock and a hard place.
“An adviser may feel that it’s their duty to look after their best interests and this could mean protecting clients from themselves essentially.
“And if your prudent advice cannot stop a client from making excessive withdrawals then they may feel they have little option but to terminate the relationship, because clearly they are not a client that requires financial planning or advice.”
Advice firms may have no choice other than to drop clients who do not listen to advice so that they can avoid a Financial Ombudsman Service (Fos) complaint, he said.
Mr Chan said: “Chances are good that that very client could go on to make a successful complaint to Fos because they’ve now run out of money and their adviser has just let that happen after all these years.”
Full article link: https://www.ftadviser.com/pensions/2019/07/26/advisers-drop-clients-over-drawdown-concerns/
