My fifth call of the month from an offshore financial adviser. These are the people who lurk outside the highly regulated ambit of UK financial services industry legislation, in just about every place where Britons work abroad – Hong Kong, Dubai, Guernsey, Malta, most major European capitals.
What’s wrong with them? Well, how long have you got? They’re usually unqualified, mostly paid by commission so hugely incentivised to sell unsuitable, cost-loaded products. Oh, and they’re also unregulated. Or at least not registered to give financial advice – with no onshore financial regulator bothered enough about checking up on what they do. In some countries it’s worse – they’re often self-regulated. All of which amounts to much the same thing: there’s no protection available for consumers when it all goes wrong. And it does go wrong, frequently.
Many of these firms sail close to the wind, some too close, meaning that when the lax regulators do eventually catch up with them, they often shut up shop and move, leaving customers out of pocket.
Fines are seen as an occupational hazard – in the same way, perhaps, that career criminals view prison.
How to spot these firms is almost an art in itself. They love old-fashioned English names that sound similar to long-established British firms (it’s no coincidence, they intend you to confuse them).
Their advertising is often tilted at the opposition (“we’re nothing like them”), and they bleat about their “valuable” qualifications (most of which aren’t worth the paper they’re printed on, having been obtained literally by correspondence course or attendance at something resembling a half-day seminar).
With regulatory run-ins a permanent feature of their business model these firms lurk offshore, operate out of sight of any regulators worth their salt, and are bang out of order – their advice is costly, dangerous and ought to come with the financial services industry equivalent of a cigarette packet-style health warning.
After the last cold call I received, a close colleague suggested summoning one of these self-styled “wealth managers” to an imaginary meeting and wasting several hours of their day.
I thought this was a great idea and I decided to put it to the test at the earliest opportunity. My carefully honed ploy backfired today, however, when the phone rang and the caller ID showed a +971 prefix – that’s the United Arab Emirates, home to a lot of the worst bottom feeders in the offshore financial services industry. However well the call goes, I knew a Dubai-based adviser was not going to nip over here for a meeting any time soon.
The caller, from a firm whose website says it’s based in California (what chance of decent regulatory oversight from there, I wonder?), had not properly introduced himself before he launched into a series of questions about my pension. Now if there’s one thing I do find irritating, it’s people who can’t or won’t explain who they are at the outset. So, the call went like this:
Me: Before you start trying to sell me something, how about actually telling me who you are and what you’re calling about?”
Caller: Oh yeah, well my name’s John and I’m calling from xxx Advisers.
Me: And you’re calling me from the UAE because?
Caller: Well, I wonder if you’ve considered all the issues involved with your pension when you left the UK?
Me: My pension is just fine, thanks. And why would I want to talk to someone in the UAE about my personal finances? I get calls from people like you every day. You’re just another financial salesperson hawking some dodgy product. I bet you’re not even properly regulated.”
Caller: Oh no, we’re completely different to all the others. Haven’t you heard about us?
Me: I don’t need to hear about you. You all say you’re different to all the others. But you’re not, you’re all the same – and here you are, cold calling people you don’t know about products you’re not qualified or licensed to discuss, with solutions to problems they don’t have. If we needed people like you, we’d be calling you.
Whereupon the call ended. So the mission continues. With calls averaging one a day, it won’t be long till I find a local adviser willing to trek here for a meeting. Let’s see.