Estuarial investors – running scared?



Al Rush and I are aiming for a balanced great transfer debate where the voices of all sides of the conversation will be heard. So we have stretched out the hand of friendship to the estuarial adviser and investment manager which is currently threatening to sue me.

But the CIO of the organisation does not think it appropriate he attends the debate as he knows nothing about the advisory process. He tells Al and I that he is busy writing a defence on conditional pricing and he regrets that his colleague, who is issuing the threats, cannot turn up either. There is someone from the estuarial outfit turning up but he is not adviser or investment manager but an intermediary relationship manager. We assume this means he is there to tout for business.

Since the purpose of the Great Pension Transfer Debate is to consider the technical, ethical and social purposes of pension transfers, the failure of one of Britain’s largest advisers on asset transfers is regrettable. Their presence in predatory mode is of questionable value. One would have hoped that – sitting on a sackful of money as the estuarial adviser is, it would have wanted to put something back. But that is not to be.

Of greater significance is the statement from the CIO that the management of monies arising from transfers and the origination of that money can be treated exclusively. This is not my understanding. The FCA is making it clear that advisers cannot consider the transfer exclusive to what the outcome of the transfer will be. Where clients of the estuarial adviser find their money managed by the estuarial investment manager, it’s clear the left must know what the right hand’s doing – and vice versa.

As I have written several times on this blog, advisers are accountable for the destination of the money as part of the advisory process and those advisors who do their work for free , providing their colleagues are employed to manage the resulting “wealth” are doubly accountable.

Adviser arguments that claim non-accountability for investment outcomes are bogus

Investor arguments that claim non-accountability for advice are similarly bogus.

It is implicit in the advisory contract that the advisor will do no harm. If the adviser prices his contract with his customer at zero on the basis that the investment management fees will subsidise his work, he is transferring the obligation to “do no harm” to the investment adviser.

So it an – and IMO should – be argued that the CIO of the estuarial adviser needs to be clued up about what is being advised and how it’s being advised.

But more- much more than a regulatory and legal obligation, the investment manager has a fiduciary responsibility, by which I mean a duty of care. It is not his money he is managing. It is – to coin Kaye’s phrase “other people’s money”. There are of course investment manages abroad who do not recognise this distinction, they are quite comfortable treating other people’s money as their own but we are not saying this is what the estuarial manager is doing.

There is still time for the estuarial CIO to change his mind and come and find out how the money he manages is sourced. He only need search for the Great Transfer Debate in and press “register”; – as many advisers advisers a day are doing. The event is on Monday, it looks a sell-out, be there or be scared.


I’m in Iceland for the rest of the week! Boy – it feels like going home!

The link to the debate is here   

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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