1. Neil Liversidge MD of West Riding Personal Financial Solutions writes me a personal letter of complaint
following Money Box on Saturday 10 September 2011.

From: Neil F Liversidge [mailto:neil@wrpfs.com]
Sent: 10 September 2011 19:14
To: paul.lewis@bbc.co.uk; paul@paullewis.co.uk
Subject: Money Box 10 September 2011 - Disgraceful and Misleading Reference to Trail Commission

To Paul Lewis, Money Box, BBC Radio 4

Dear Paul

In today’s Money Box you referred to trail commission as ‘one of the industry’s best kept secrets’.  My clients will certainly not recognise that description though because what they pay is spelled out to them in the client agreement documents we provide. They know precisely what they pay and what they get in return. Given that the bulk of our business comes by referral from existing happy clients they seem to be very happy with the deal.

In addition to those benefits we contractually provide – ongoing reviews, personal meetings at their own homes, free fund and product switches etc – we also provide a vast amount of complementary advice and service for which we make no charge whatsoever at the point of use. When clients call or email to take up our time for a bit of advice here and there about this and that, we don’t put them on a meter and send them a bill. Likewise we don’t bill them for handling the thousand-and-one jobs incidental to managing their ongoing finances – all sorts of things from notifying address changes to obtaining probate values when a client dies. In my experience this is the case with the vast majority of IFAs.

We play fair – more than fair – for the trail we get.

I think it really is a shame Paul that once again you cannot resist slipping in the odd word or phrase designed to slander the personal finance industry and engender mistrust. The sad fact is that a lot of people who want something for nothing and that proportion of the population is growing thanks to the ongoing campaign of disinformation run by you and others like you.  You purport to be a consumer champion but in reality all you are propagating is financial short-sightedness in the buying public, and a false belief that they can expect advice and ongoing service for free.  I’ll cite a real and recent example that illustrates the dangers which can result from that delusion: Every week I do a free financial advice spot on Radio Leeds. Judging by the feedback it’s very popular and a great many listeners contact me direct. I probably spend a couple of hours a week answering generic queries by phone and email as a result of each show. Most don’t turn into clients but a few do. About three weeks back I gave an hour in my office here to one such listener talking him through his pension options. Last week he wanted another meeting and some complex advice on a number of pension and investment related matters. It would obviously involve a significant amount of work and a substantial amount of liability to us should we get it wrong, so obviously we ensure we don’t get it wrong by thoroughly fact-finding every client, conducting appropriate research and then spelling out the advice in a report. I explained what was involved priced up the work on a fixed fee basis at £550. Not a lot considering we would be advising on investments worth over £100k and he would in any case be looking at receiving a tax-free cash sum that could be as much as £70,000. At this point however he suddenly decided my advice wasn’t worth having and actually stated, straight out, that he wasn’t paying for advice and he would just commute as much pension as possible and take the maximum tax-free cash. Off he went. Well, it was his choice, but he is relatively young, has a large final salary pension pot, and by taking a higher pension instead of extra tax-free cash he would get an effective gross rate of return of 11.11% index linked by RPI, so that probably wasn’t the best option. Without spending time doing a full fact-find however I would not ‘know my client’ as the FSA requires and would not be able to advise him. Unlike you though Paul, I am not on a taxpayer-funded salary and I have to be paid somehow for the work I do. Funnily enough my staff expects to be paid too, likewise the utility companies, our landlord and our other suppliers, not to mention our friends the FSA. I also chip into something called the Financial Services Compensation Scheme and the Money Advice Service; all for the public benefit, all out of my pocket and all of which you and your ilk give us no credit for.

Whilst on the subject of things we get no credit for, on the Saturday after Northern Rock was nationalised a few years back I opened my office as a general financial surgery for the reassurance of the general public. There was no Northern Rock branch in Castleford but there was no shortage either of distraught pensioners frightened of losing their life savings. Much of this was down to Any Questions the previous evening. Despite the fact that NR had been nationalised one of Jonathan Dimbleby’s village idiot panellists had said NR depositors should be worried and that she would certainly empty her account. I went on Any Answers that day to set the record straight, to explain that the fact it had been nationalised meant that there was no safer place for deposits. I’m sure Jonathan Dimbleby can find the tape if you want to check. Funnily enough though, I don’t remember Money Box doing anything on its account that Saturday to set the record straight but hey, no news is good news and good news is no news, right?

Some years ago in my DBS days I took part in a Money Box debate with an ex-IFA who had retired in the 1980s. His angle was that IFAs were all overpaid these days. I asked him how much he had paid his compliance staff. After some bluster he admitted that he had never in fact had any compliance staff. I managed to draw out similar admissions that he had paid no professional body fees, no FSA fees, no FOS fees, no FSCS contribution and the rest. He probably had no qualifications either, apart from an infinite ability to voice uninformed opinions.

The fact is Paul that the giving of advice is a vastly more expensive business than it was 25 years ago and the increase in cost has not gone into advisers’ pockets but into the pay packets of regulators and the associated compliance industry they have spawned.

I enjoyed that little radio debate and the opportunity it gave me to enlighten the deluded and inform the uninformed. I’m up for it again Paul, anytime, anyplace, anywhere, and with anyone you like – especially Ivan Massow.

Have you got the balls for it Paul? Has he?

All my contact numbers are on the bottom of this email and I eagerly await hearing from you as to when it can be scheduled. If you won’t facilitate a fair debate Paul, then the decent thing to do would be to apologise on air and set the record straight yourself.

With kind regards,

 Yours sincerely

 Neil F Liversidge, Dip PFS
Managing Director
West Riding Personal Financial Solutions Ltd, Authorised and Regulated by the Financial Services Authority.
West Riding Personal Financial Solutions Ltd is Registered in England as Company Number 5142989.
Registered Office is at 17A Sagar Street, Castleford, West Yorkshire, WF10 1AG.
Website at www.wrpfs.com

e-mail Paul Lewis on paul@paullewis.co.uk