Why the ambulance chasers are looking at you and licking their lips

The total paid out in refunds and compensation for PPI mis-selling reached £34.4 billion in April 2019.

That’s an eye-watering amount of money, especially if you’re a bank shareholder! It’s also no surprise that it’s been called the people’s quantitative easing. However, the 19th August claim deadline is looming large.

How does that affect financial advice firms, we hear you ask?

Well, it means that the Claims Management Companies (CMCs) which sprung up to take advantage of PPI mis-selling, will be looking for another target. They will, no doubt, look for sectors where:

  • Businesses are well capitalised and trading profitably
  • Public trust is low
  • PI insurance is in place

Perhaps you’re now starting to see why we believe the CMCs could soon turn their attention to the financial advice profession.

In fact, it’s already happening.

Only last week we heard an advert on our local radio station asking “anyone” who has held an ISA or SIPP and “lost money” to get in touch. Meanwhile, Google is awash with adverts such as these:

During the coming years, we believe the CMCs will focus increasingly on the financial advice sector.

But where?

  • Over the past decade, despite the odd hiccup along the way, we’ve seen positive returns from equity investments; it’s, therefore, unlikely they will start there.
  • The number of mis-sold SIPPs, while distressing for those affected, are relatively small; it’s unlikely to produce the volume of complaints needed to satisfy the hungry CMCs.

We, therefore, believe there’s a high probability that CMCs will target investors who have signed up to receive an ongoing service from their financial adviser.

No one would argue that someone who pays for a service, but doesn’t receive it, shouldn’t be compensated. However, there may be times when service delivery can’t be proved due to poor record keeping. Alternatively, some clients (probably in the minority) might make vexatious complaints.

Therefore, being able to prove the nature of the service the client agreed to, how much they contracted to pay and that it delivered are vital to defending future claims.

Of course, the risk of receiving a complaint isn’t limited to the potential payout; the time and resources taken to mount a defence are likely to cause significant disruption, then there’s the emotional toll it will take on you and your team.

Avoiding complaints in the first place, or at least ensuring they are easily defendable means creating good habits and processes to ensure that the delivery of ongoing service is recorded in detail.

Five tips to prove ongoing service delivery

  1. Timely recording of events

It’s generally accepted that the timely recording of events, actions and so on will lead to greater accuracy.

We’ve all made a mental note to record something when we got back to the office, only for life to take over and it slips our mind. Forgetting to add a note to a client file could be the difference between a complaint which is easily defendable and one that’s upheld.

The systems you use to record service delivery should, therefore, be accessible across different devices to ensure records are updated as soon as possible.

  1. Record the things which didn’t happen

Every adviser has clients who don’t respond to requests to arrange a review meeting. It could quite easily be these people who complain about a lack of service delivery.

Every interaction should be recorded:

You’ve sent a client an email requesting a meeting: Record it

The client fails to respond: Record it

You follow-up with the client, explaining why it’s important you meet: Record it

The client fails to respond: Record it

We could go on, but we’re sure you get the picture.

  1. Motivate your team

Everyone in your team, from the management to advisers, paraplanners to administrators, must understand why it’s important to keep detailed records and the implications of not doing so.

It only takes one demotivated or disinterested member of staff to keep poor records and leave you unable to defend a complaint.

  1. Use good systems and processes

The recording of service delivery shouldn’t be left to chance. That’s why it’s important to build good processes using systems designed for the job.

Ideally, the system you use should be available across a wide range of platforms, making it easy for every member of your team to update. Advisers who are out seeing clients should have access to an App allowing the timely recording of data, while those who are office based are more likely to use a desk-based system.

  1. Backup and security

If you can’t prove it, it didn’t happen. That’s why security and frequent, robust backups are crucial.

You must have the confidence in your system that no matter what disaster occurs, man-made or natural, your data is available when you need it.

A word about how we can help

Those hungry CMCs could soon be staring at you. Not because you’re guilty, but because you run a profitable, well capitalised and insured business. You’re potentially an easy target, even if you’ve done nothing wrong.

The Trailblazer Tracking system was designed by financial advisers for financial advisers.

It allows every member of your team to record client interactions in a timely and detailed way. Advisers can use the App via their phone or tablet, while administrators and paraplanners can use it on their desktop. Furthermore, managers and business owners can drill down to understand the progress each member of their team is making in delivering the agreed ongoing service.

Finally, the whole system is secure and frequently backed up, ensuring your records are always there should you ever need them.

If you would like to know more, please click here for a free trial or click here to email us for further information.