The Senior Managers and Certification Regime, in force since 9 December 2019, has made it the responsibility of advice firms to check the “fit and proper” status of advisers.
We all know and are well aware of the ever-increasing risk of financial scams, and there is no doubt that these people are getting cleverer and cleverer. We’ve heard stories of firms being “cloned”, websites and all, the scammers making themselves look very professional indeed.
We, as a firm, have had a number of calls and emails sent to us in desperation, people trying to track down “advisers” who had apparently worked for us.
Scammers contact potential clients, often out of the blue, purporting to be working for perfectly legitimate firms, in the hope that they will convince an unwitting person to part with their hard earned cash, with the person and the money, more likely than not, never to be seen again.
The FCA Register provided the one place where the consumer could check that they were dealing with an authorised individual, but that has now gone and isn’t set to be replaced until December 2020. The scammers must be rubbing their hands with glee – what an opportunity! They now have free rein to explain that they are not on the register for a perfectly legitimate reason – they don’t need to be!
But what can we do about it? I’m afraid, the answer is probably not an awful lot. But, we can all raise awareness of the need to be vigilant. We can encourage the general public to check out their adviser first. They might not be able to do it on the FCA Register for the moment, but we can direct them to other directories, maybe the CISI or the CII/PFS.
We can also be more wary in our day to day dealings with clients, always checking the identity of clients, knowing our clients well enough that we can identify actions that are out of character, and checking with them when they want to make any changes or withdrawals from their investments.
We have certainly implemented changes within our own business. No instructions are actioned off the back of either email or letter; we always call the clients to confirm their instructions and what they’re needing the money for.
But, I’m afraid that we now live in a world where the scammers are often cleverer, or probably more devious, corrupt and immoral, than we can imagine.
It’s the world that we live in, and I’m afraid that we just have to learn not to trust anyone – what a sad situation to be in!
Nicola Watts APFS Chartered Financial Planner, Chartered Wealth Manager, CFP Chartered FSCI - director of Jane Smith Financial Planning
After joining the family business in 2000, Nicola qualified to provide advice in 2001, and has been a director of the business since 2006. Since the retirement of her mother (Jane Smith), Nicola bears sole responsibility for the management of the firm, and the advice provided to clients. Nicola is married to David and has two young children, Emily and Olivia, and Poppy the black labrador.