setting up a new pension

On the other hand I do know of execution only brokers who eventually have to draw a line in the sand and sometimes say "absolutely no advice" due to people wasting their time by ostensibly opting for execution only but then actually looking for quite a bit advice.

The regulatory issues are another issue but one would hope that some level of pragmatism was applied and it looks like some intermediaries do just this.
 
Before providing a product or service to a​
​
consumer, a regulated entity must gather and record sufficient information from the consumer to enable it to provide a recommendation or a product or service appropriate to
that consumer. The level of information gathered should be appropriate to the nature and complexity of the product or service being sought by the consumer, but must be to a level that allows the regulated entity to
provide a professional service.

This requirement does not apply where the consumer has specified both the product and the product provider and has not received any advice.

If asking and answering questions does not constitute advice, what does?

Liam D. Ferguson
www.ferga.com
​

 
In my way of looking at it, giving advice involves giving an informed opinion.

Providing information is merely providing factual answers to factual questions, for example what is the max pension contribution as a % of pensionable earnings for someone between ages 30 and 39*...answering a question like that is not providing any form of advice it is merely providing information that should be provided free.

*The answer is 20% of pensionable earnings - that is not "advice"!
 
Okay - if you have a workable system to allow you to answers questions that are involved with the provision of information but refuse to answer those that involve provision of advice and still charge a discounted "execution-only" fee I applaud you.
 
Thanks for the applause - I am certainly willing to give it a go.
 
That's a great service.

You should really post full details of the company so that more people can contact you.;)
 
Thank you FK - you changed your tune fairly quickly from a dissenter to a supporter :)

If people would like to contact, sure they can use the PM function, a number of users have done so previously.
 
CapitalCCC said:
In my way of looking at it, giving advice involves giving an informed opinion.

Providing information is merely providing factual answers to factual questions, for example what is the max pension contribution as a % of pensionable earnings for someone between ages 30 and 39*...answering a question like that is not providing any form of advice it is merely providing information that should be provided free.

*The answer is 20% of pensionable earnings - that is not "advice"!
Click to expand...

Using this example, if a person asks what COULD I contribute as a % of pensionable earnings, then one would be giving information and not advice.

If the person were to ask, what SHOULD I contribute, then one would be giving advice.
 
Apologies to the original poster, as this thread seems to be veering off into a discussion of execution-only vs advisory services.

While we're all happy with the distinction between advice and information, I'd be concerned that the Financial Regulator may not share the view.

KalEl gave the following as examples of his queries: -
Is taking a lump sum at retirement and rolling it into an ARF the best solution if you hope to have a sizeable fund? Is an ARF the best way to go from an inheritance point of view for your kids?
Click to expand...

The Consumer Protection Code says: -
...the consumer has specified both the product and the product provider and has not received any advice
Click to expand...

My interpretation would be that KalEl is not clear on what product s/he requires and therefore needs advice, not execution-only.

Not trying to be argumentative; just interested to hear views.
 
Liam, you're always a very helpful contributor on AAM but I think you're being unfair here. It's in your interest for this Code to be strictly enforced. What CapitalCCC was suggesting was advice off the record and without recourse which I would not have a problem with; in fact it would be a plus. I for one would not run off to the Financial Regulator or whoever and report someone for helping me. There should be a middle ground between "execution only no advice" and massive charges and common sense seems to have created one.
 
It's a very difficult topic and there is no straightforward answer.

If someone wants to provide advice and information and charge execution-only prices, that is good for the consumer. My small experience of execution-only brokers is that they do get asked questions and they do tend to answer them.

Financial advice should not be given without a fact find. That is common sense and it is also the Financial Regulator's code. I am wary of questions on Askaboutmoney which say "Where is the best place to invest €30k?" Some background is needed to answer it properly. If I go to an exectution-only broker and ask this question, they should not answer it without doing an appropriate fact find. If I go to an execution-only stockbroker and say I want to buy an Eagle Star investment fund, but ask their advice on which one, the fact find is less relevant, but still a bit relevant. If I go for an Eagle Start investment fund and they encourage me to switch to a Caledonian With Profits fund, then they should do a fact find and a detailed "reasons why" letter.

Brendan
 
LDFerguson said:
My interpretation would be that KalEl is not clear on what product s/he requires and therefore needs advice, not execution-only.

Not trying to be argumentative; just interested to hear views.
Click to expand...

I would point out that KalEl has intimated that he/she would be interested in going down the PRSA route - the decision to go down the ARF or annuity route is one that KalEl will not face until retirement date - possibly 15 or 20 years away dare I say KalEl?

So there is no advice needed in relation to an ARF at this point - merely information (along the lines of this post) and more information to enable Kal to make an informed decision - my view is that it is the policy holder's money...not mine...so my job is to provide them will all the necessary information to make an informed decision.
 
CapitalCCC said:
I would point out that KalEl has intimated that he/she would be interested in going down the PRSA route - the decision to go down the ARF or annuity route is one that KalEl will not face until retirement date - possibly 15 or 20 years away dare I say KalEl?

So there is no advice needed in relation to an ARF at this point - merely information (along the lines of this post) and more information to enable Kal to make an informed decision - my view is that it is the policy holder's money...not mine...so my job is to provide them will all the necessary information to make an informed decision.
Click to expand...

I'm 27 so about 28 years until retirement. Certainly don't want to purchase an annuity which will die and not pass on to my kids before I die. Want to draw down whatever percentage of the fund I can and then bung it into an ARF I think. I know I want to go with Eagle Star and the DIS looks good to me...seems like common sense. Just need my hand held so to speak I guess.
 
It's in your interest for this Code to be strictly enforced.
Click to expand...

On the contrary - if I was being selfish I'd say that my own interests would be best served if there was no Code or regulation whatsoever. When I started in this business in the late eighties, there was very little regulation and the process of selling any sort of investment or pension policy was pretty much (a) talk to the client about it and (b) get them to sign the form. If such a regime still existed today I dare say I would be earning more money as it was far less time consuming and therefore I could sell more products in a working day.

Besides, I offer execution-only services and also advisory services, so I'm not sure why you'd think it's in my best interests for this Code to be strictly enforced, above any other broker's.

But unethical salespeople created a need for regulation and so we work with it. The regulations do improve the perception of professionalism in this business so looking at the bigger picture they're to be welcomed. They also do protect consumers, especially the vulnerable - those who wouldn't know how to switch on a computer, much less study Askaboutmoney.com.

Anyway, I suppose my objection to the widespread blurring of lines between advisory service and execution-only can be summed up in two points: -

(1) It makes it difficult for an "ordinary" consumer (not the clued-in punters who frequent AAM) to understand what sort of advisor or service is best suited to their needs.

(2) It leaves the door open for unethical brokers to sell inappropriate products to unwitting consumers, cover themselves with an execution-only declaration and all of a sudden a widow or orphan loses a chunk of her life savings to a product she didn't understand, the broker can't be pursued because she signed an execution-only declaration and the myth that this industry is populated solely by charlatans and rip-off artists gets reinforced...again.

I've no doubt that CapitalCCC, like all the brokers who post on this board that I've seen, will offer sound, honest and good advice to clients regardless of whether or not they're required to do so by legislation. If all brokers acted with integrity, there would be no need for regulations at all.

I've no problem with a certain amount of pragmatism being shown in the interpretation of the Code, when it benefits a consumer. I just think there are risks involved if the Consumer Protection Code is not seen to be enforced, as it will therefore follow that unethical brokers won't be afraid of it.
 
I feel that if a prospective pension client approaches me with a good understanding of what they would like - and they just want some further information that is widely available in the pensions arena, but not so easily available to those not working in this sphere - then that client is indeed an execution only client and they should be given the various little pieces of info (not advice) that they require.

I gather from Kal El's posts that he is neither a widow nor an orphan.
 
But do you see my point - in this instance you're making a perfectly valid (and I would say correct) judgement call that KalEl knows most of what he's doing and therefore just needs a bit more information. By extension, if someone came along requesting Execution Only and you felt they didn't have a clue what they were about, I presume you would steer them towards an advisory process. Like I said above, I don't doubt for a moment that you personally will use your judgement to give appropriate advice to anyone who comes to you.

But should the Consumer Protection Code offer the same leeway to make judgement calls to unethical brokers out there whose only interest is maximising their own commission regardless of the effect on their customers?

I gather from Kal El's posts that he is neither a widow nor an orphan.
Click to expand...

True, but that information was voluntarily revealed by KalEl in his second and subsequent posts on this thread. In the real world, such information as he revealed would only be disclosed in a Fact Find.
 
In the real world, you would find out pretty quickly if someone was an orphan or a widow when you met them face to face.

I take your point, but I feel it was quite wrongly used as a criticism (earlier in this thread) of my pointing out to Kal El that an execution only deal can still involve an element of assistance and guidance.
 
Well, I still hold that some of the questions posed by KalEl here http://www.askaboutmoney.com/showpost.php?p=438898&postcount=13 cross the line between requiring information and requiring advice. And I therefore feel that an execution-only service would be inappropriate here.

But that's my interpretation; you have yours. Without asking the Financial Regulator to adjudicate, neither one of us knows for sure which interpretation is closer to the Code. I'm happy with my interpretation; I'm sure you are with yours.
 
Cut price brokers are not charities. They charge less, but still get paid some commission, plus overide for volume.
 
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