FMA Publishes a Guide for Directors with the IoD
Pre-screening and Positioning Before Pricing Risk

Scope of Service: Don't Agree To Fail

Once they have agreed to enter the advice process, most clients are happy for advisers to lead: defining what information to collect, how to analyse, and what to recommend. Some are difficult: immediately severing important areas of their financial lives and marking these off as taboo, or worse they specify just one area of work:

"I only want mortgage protection insurance"

It sounds specific, but given there is no fixed definition of "mortgage protection" it is actually a trap. In fact agreeing to such a limited scope may be functionally the same as agreeing to give bad advice.

Unless the boundary for a limited scope of service can be clearly defined there may be no safe way to engage with such a client, and so it might be better to decline the engagement.

If you accept that then you might as well challenge the client to accept a broader scope of engagement. One way to do that is to point out that the client always retains perfect freedom to decide what they will proceed with. So they get the benefit of the whole advice process even if they only plan to proceed with the 'mortgage protection' or the 'life cover' or whatever limited part of the picture they started to define.


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