Yet another difficult area to legislate effectively.
Yes, this is advice. As earlier comments have suggested, it is both 'general' and 'personal financial' advice, and the tie between the two is extremely difficult to effectively legislate. This is the case for all advice surrounding products - so claims is no different in this way.
However, claims ARE different.
Like most other long-lived financial planning businesses, we have managed a large number of claims over the years. This includes a list of claims that might never have been paid without our support and intervention. I am not certain that the clients involved would have paid for our preparation and compliance surrounding an obligatory Statement of Advice (SoA) at that time.
The costs and time and compliance risks involved would reduce our own businesss enthusiasm for pursuing such activity. The risk/reward equation becomes highly skewed against the adviser.
There appears to me to be little political or legislative understanding or appreciation of the relationship-based nature of adviser work. Our business is based on long term relationships. Banks and institutions are disinterested in long term relationships. They are interested in transactions. Legislators and consumer advocacy groups spent inordinate time and money and energy trying to manage the risks associated with transactional financial services. We long term advisers are caught up in this imbroglio, to nobody's benefit.
Claims management is a service that advisers have provided as part of the overall "lifetime" services assumed to be part and parcel of the ongoing fee arrangement. Tear apart the ongoing fee arrangement and you reduce the ability to subsidise these activities. Fee for service is all well and good when folk are healthy, wealthy and wise. For all the rest, it is an option they cannot afford.
I wish more people would take the time to understand this.
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