Simon Read: When it comes to advice about your finances, it is really a question of trust
After I wrote about the subject of financial advice two weeks ago, I’ve had quite a few emails and letters from readers. There have been some excellent points, which I’ll follow up in future weeks, especially as we get closer to the UK’s financial advice shake-up which takes effect from January.
But I’ve also been contacted by people who need financial advice and don’t know where to turn. Depending on your situation, there are various places to look, from online directories of independent financial advisers, to local branches of Citizens Advice.
However, a news story which broke this week has made me a little more hesitant about simply pushing people towards their local advisers.
You probably missed it as the story was only published in the Henley Standard and the financial trade press. But it shows that we need to be wary of unscrupulous advisers as much as ever.
More worryingly, it also demonstrates that the key issue to face when seeking help with finances is not the fear of an adviser mis-selling you a dodgy investment, but the concern that he or she may betray your trust and simply trouser your hard-earned money.
It happened to a 93-year-old woman who sought financial advice from a local independent adviser in Henley. She turned to Sanjay Parmar, who had set up his own financial advice firm in 2006.
The pensioner put her trust in Parmar, which he then betrayed by stealing her money. On his instruction, the elderly woman wrote four cheques, totalling £58,000 between April and July 2010, after being told they would be paid into her savings account.
The cash was not paid into her account. However, this fact was only uncovered after a relative of the victim, who lives in Guildford, sought legal advice after realising that the money had disappeared.
Andrew Skoglund, the police detective who investigated the case, said: “This man was in a position of trust and used this to take advantage of a vulnerable, elderly victim who believed she was handing over money in good faith to invest in her savings.”
After admitting four counts of fraud by abuse of position when he appeared at Guildford Crown Court, Parmar was jailed for 14 months.
Now I’m not about to suggest that there are other advisers out there who are itching to steal your cash. But this woeful story makes me more wary about trusting anyone with my money.
Which begs the question, how can you find someone you can trust? A person may have all the qualifications - and knowledge needed to make a decent adviser, but that counts for nothing if they are dishonest.
At the website VouchedFor.co.uk, people can rate their financial adviser. Such reviews can be helpful, but ultimately only a personal recommendation from someone you trust – a family member or close friend, for instance – may really give you the confidence that the person advising you can be trusted.
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