Execution only introductions sound perilously like unregulated financial advice

There are rumbles of concern on the retail financial services bush telegraph about ‘advisers’ introducing execution only alternative investments to Sipps. Some of these advisers are no longer able to advise on investment, but they can receive commission, pretty high commissions, for the introduction. This is legal and may be fair enough if done correctly but you can see the risks. Certainly if these introducers were the former IFAs to people to whom they are introducing these alternative investments then there must be a substantial risk of misunderstanding.

If they are introducing clients into an advised environment, or have even set up an introducing arrangement for investment while focusing on mortgages and protection, then that is obviously much better.

But the risky equation is surely something like the following -

Introduction to risky investment such as foreign property development plus persuasion by the introducer using a supposedly execution-only Sipp environment = something very close to inappropriate, unregulated financial advice.

I’m sure there is another way to look at it where the initiative is taken by a veteran investor who likes this sort of thing. But do they need an introducer?

We would like hear your views certainly if you think we’re being too paranoid here at Money Debate towers, but we fear retail financial services is facing another risk from left field.

http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/digg_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/reddit_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/delicious_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/blinklist_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/blogmarks_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/furl_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/google_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/myspace_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/facebook_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/yahoobuzz_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/twitter_48.png http://www.themoneydebate.co.uk/wp-content/plugins/sociofluid/images/meneame_48.png

  • Peterrobinson7

    John, we felt the subject you address was so interesting we wrote a 78 page report about Alternatives and SIPP’s. You and your readers can download a complimentary copy of the report at http://www.aireport.co.uk. AiR 2013 – Alternative Investment Report is CII CPD accredited. Enjoy!

  • martinbamford

    You’re not being paranoid at all. We believe the FSA/FCA needs to draw a very strong line between execution-only and advised sales. They appear to be considering this as part of the Mortgage Market Review, so hopefully it is on their agenda for the retail investment sector also.