Ethical Professionals 

In the parallel universe that is Complaint Opportunism, it seems that there is relatively little left to surprise one, in terms of the kinds of antics that are employed in order to extract redress from alleged misselling cases.  ValidPath, like any financial services network, is regularly on the receiving end of claims which make 'Lord of the Rings' look like sober investigative journalism.  There are several core themes which repeat, ad nauseam, in such claims:
  • a sense of entitlement
  • a recollection of events which is grossly at odds with any objective record, as evidenced by the case-file
  • a determination that 'my recollection' is the only version of events which is dependable, even if it presents clear and insoluble inconsistencies
  • a forthrightness of expression which is in inverse proportion to the degree of legitimacy of the claim
Anyone who thinks with any degree of seriousness about our culture can immediately see how these themes arise directly out of either a particular political mindset, or alternatively from beliefs influenced by postmodernism.  What is a surprise, however, is the way in which the FOS treats such cases with every evidence of seriousness.  We have seen instances where the claimant's allegations are profoundly at odds with the objective data that is available, but where there is clear sympathy (expressed by the FOS) based upon either the fact of some kind of loss, or instead the degree of indignation evinced by the claimant.  Whilst the cost is usually minimal, one wonders about those cases which are dismissed, but where the claimant still gets a cheque for "distress and inconvenience".

It does seem perverse to reward people for a sustained action of misrepresentation which ends up costing intermediaries £000's in wasted time and legal costs.  Please note that I am not arguing here against the valid claims made by people who have been genuinely disadvantaged by negligent advice, or poor market practices.  Our own experience indicates that such cases are a relatively small proportion of the volume that cross my desk.

The culture of Complaint Opportunism is frustrating enough for intermediaries, most notably because the Regulator either doesn't recognise that it is a real phenomenon, or is unprepared to do anything about it.  I would wish to entertain the hope that those in authority over us may one day wake up and realise that our profession is worth protecting, but currently there seems little basis for such a leap of faith.  In the meantime, however, there is a New Kid On The Block (NKOTB) - exploiting the rules and human venality in order to circumvent the FOS and leverage their own fees, on the litigation route to a redress payment.  One's hopes that the mere fact of regulation by the Law Society might inculcate a more careful and - dare one say - a more truthful approach towards the data are cruelly dashed by the experience itself, which tends to involve a brutality that is breathtaking, and a pathological degree of unconcern towards the documented facts.  The New Kid plays the system, tactically, counting on the penal expense of defence to deter resistance.  This is why all of us end up paying so much higher PII premiums.

What is the answer?  Indeed, is there an answer?  I would like to think that there is.

Part of the answer lies in greater professionalism.  Gill wrote about this last week, as she highlighted the embedded value of the 'trusted adviser' model.  This is not (necessarily) about having more certificates on our office wall.  The NKOTB has plenty of those, but in reality functions as a parasite.  This is about defining our role, in relation to our clients, at the highest possible level - in terms of standards and outcomes.

And the other part of the answer lies in excellent compliance.  This is not the be-all and end-all.  It does not in any way replace the professionalism, incorporating advice which demonstrably improves the client's financial outcomes - but it is perhaps the best tool for reducing the risks presented by Complaint Opportunism.

Further reading...

True Professionalism by David Maister (there's a Kindle version too!)
The Trusted Adviser by David Maister
TCF Resources from ValidPath (you need to be logged-in).  This page includes a link to our 'Gold Standard Advice' resource
Ethics & Professionalism guidance from ValidPath (you need to be logged-in)
Kevin Moss, 15/05/2014