Ethics, Service Providers and Financial Advisers – A Heart-Warming Story!

What would you hope to see from a truly excellent service provider? We could all draw up our own list, but one indicator might be that, if they feel it is the right thing to do, they will act in a manner which saves you money, even if it costs them something in the short term.

So a management consultant who says, “you know, I don’t really need the ten days we agreed to carry out this assignment, I can do it in seven and save you a few grand”. Or the software provider who says, “you don’t really need our Premium subscription, I understand your needs, and the basic level will be fine”.

I’m hearing hysterical laughter from most procurement professionals reading this - no, it doesn’t happen very often, does it? But I had a personal example recently where exactly that behaviour was demonstrated, and just to make it even more noteworthy, it was an experience with a financial adviser, perhaps not the industry with the best reputation for high ethical standards.

Without going into all the boring details, I wanted to be able to take a cash lump sum from the Royal Bank of Scotland pension scheme and put it in my SIPP (self-invested pension plan) rather than getting a few thousand a year as a final salary pension based on my time at NatWest. That carries risk, but gives you more flexibility.

Now the government has put up all sorts of hoops you have to jump through to do this, because they are rightly worried about mis-selling and folk getting conned out of their money (investments in Caribbean hurricane-belt property or first growth Slovenian claret anyone?)

For example, you have to get formal documented advice from a registered financial adviser (with additional qualifications to be deemed a Pension Transfer Specialist) before you can move the money. Even then, some SIPP platform providers are not at all keen to accept such transfers because they are worried about future claims.

To get this advice, I did my research and came across an IFA firm in Newport who offered a clear, fixed price approach to their work – which as a procurement person I liked of course. I thought their overheads might be lower than Surrey / London based firms too.

The report I had to get would cost me £2500 – not cheap, but that was at the low end of the “going rate”.  Having got the advice, if I wanted to go ahead and transfer the money out, my adviser (Gavin Kingsley) said he could help find a suitable “home” for it in terms of a SIPP platform, because that wasn’t a simple matter either, and that would cost about the same again – quite a lot, but I was happy to go ahead.

Then a few days later, he called. “I’ve found a platform that will accept your transfer once I have done my report, and they don’t need a financial adviser to handle the process – so if you are happy to make your own investment decisions (which I was), you won’t need me for that stage”.

This confused me. My adviser was telling me I didn’t need to pay him over £2K, money that I had been quite prepared to pay – OK, it saved him a bit of work, but even so, there must be a catch? But there wasn’t. My money is now safely extracted from RBS, sitting in my SIPP with AJ Bell (I have been a Hargreaves Lansdown customer, and still am, but they weren’t keen on the transfer thing), and all is resolved.

So I called Gavin Kingsley, thanked him for his help and asked him the big question – “why did you do yourself out of that income”?  He honestly sounded a bit embarrassed at my question.

Well, it was just the right thing to do, wasn’t it? Maybe it’s because I worked in the NHS for years, that got me used to working in an ethical manner”. (Gavin was a radiographer for some years before moving into this business.)

But that was quite an expensive decision for you, in my case?

“Well, I got paid fairly for the work I did for you, I’m fine with that”.

Is there something perhaps about getting more business from me in the future?

“You always hope that of course, with any client, but no, that’s not really why I did it. I like this job because I like helping people. And it’s about the best outcome for the client really”.  

So there you have it. It was just the right thing to do, which of course it was. But if only all our service providers and suppliers would think like that, wouldn’t life be wonderful for procurement people?

Finally, please note, this is not a recommendation to move your pension away from your final salary provider into a SIPP or anywhere else – that’s a complex and personal decision. But it is a recommendation for Mr. Kingsley, and you can track him down here.

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