Philippa Gee: The cold call that left me with chills


I had such a lovely phone call yesterday. The caller was “delighted” to inform me that they had an interesting financial proposition and thought it would be of great excitement.

Basically this individual described to me how they and their company had recognised how hard it was for IFAs to cope with RDR (at this point I was not entirely sure that they had undertaken any research on my firm) and that they had come up with a solution. Perhaps it was because I was enjoying my cup of coffee, or that the sky was blue, but I let him carry on a little further.

This person offered an allegedly UK-based investment, but set up in a way where the advice fee was not taken from the product or the client and therefore apparently need not be declared. This magical apparition was to be done via a loan arrangement within the asset, which by virtue of the layers of obscure pricing, meant that the adviser received an upfront 9 per cent fee/commission/whatever and the client was allegedly none the wiser.

On what planet is this a good idea?

Firstly I cannot believe that such a product is allowed, but then perhaps nothing should surprise me. Secondly, I cannot see what is attractive about this particular investment (let’s just summarise the asset by using the words “overseas” and “property” and let you draw your own conclusions). Thirdly, if this were to happen, surely it will end up in another disaster that has to be rescued by the FSCS?

The days might be getting warmer, but this just leaves me cold.

Philippa Gee is managing director at Philippa Gee Wealth Management