Advising the Affluent, Safeguarding the Vulnerable

Unknown Speaker

Welcome back everyone to the B-Compliant Podcast—I'm Vicky Pearce, joined as usual by my fantastic co-host Rachel MacRae. Today we're picking apart some rather sobering lessons from a BBC documentary I watched this week—Football’s Financial Shame: The Story of the V11. If you missed it, it's well worth a watch, especially for anyone advising high-net-worth clients. The case centres on a group of ex-footballers—some big names like Danny Murphy and Michael Thomas—who say they lost literally millions because of risky advice from Kingsbridge Asset Management in the 90s and early 2000s.

Rachel MacRae

Yeah, it's a jaw-dropping story. Danny Murphy reckoned he lost something like £5 million, didn’t he? And he called it “financial abuse,” which says a lot. What struck me was how these were top-earning athletes but not necessarily financially savvy. They got drawn into all these high-risk, tax-driven film partnerships, dodgy foreign property deals…not only did they lose the money, but a bunch of them ended up with massive tax bills and a right old mess with HMRC left to sort out. I mean, it just really highlights how having wealth doesn't protect you from being financially vulnerable, does it?

Unknown Speaker

Exactly. It’s such a myth that only people with modest means are at risk. A lot of these young players, they might have been talented at football, but no one sat them down to explain the risks. And sadly, the documentary points to a culture of advisers chasing celebrity clients and showing off about who’s on their books, rather than putting the client first. Which—if you’re a regular listener—you’ll know is the absolute opposite of what we’re always banging on about here! Discretion and independence are essential, especially for young, wealthy clients who just don’t have the experience to spot a poorly thought out scheme.

Rachel MacRae

Yeah, and it makes me think about early intervention—should we as an industry be doing more to support financial education for these vulnerable groups? I know there’s talk of bringing more advisers in at academy level, working with clubs and agents to give players real understanding before they start earning the big bucks. But even beyond that, the reminder here for all firms is really about compliance with FCA rules. That PRIN 2.1.1R—fair treatment of customers, and all the new Consumer Duty requirements under PRIN 2A—those aren't just for show, are they? They're there because even someone with a huge income can be deeply vulnerable to, well, to bad advice basically.

Unknown Speaker

And it ties into those FCA vulnerability guidelines, like FG21-1. It’s about understanding your client’s context. Not just ticking a box. Robust governance, suitability checks…all those controls are what should stop these sorts of terrible outcomes from happening in the first place. If anything, the V11 story really just underscores, again, why we need that regulated environment and a proper ethical culture around advice, especially for the wealthy and those less equipped to spot trouble coming.

Rachel MacRae

And, you know, that's not going to be the last time we hear stories like this. But hopefully it gives everyone a bit of a nudge to reflect on their own processes and how they're looking after clients—no matter what their net worth is.

Rachel MacRae

Alright, so, moving on but staying with the theme of protecting the vulnerable…it’s another bumper week for scam warnings in the sector. We touched on this last episode when we talked about those scary lookalike FCA scam emails. Well, PIMFA have just flagged a new one: firms are getting dodgy emails claiming to offer “exclusive” access to event databases and attendee lists. You can see how tempting that might be for a marketing team, but it’s clearly a tactic aimed at getting firms to hand over info or click on links that, you know, no one should really be clicking.

Unknown Speaker

And it's not just PIMFA either! Robeco have sent out their own warning—scamsters have been going around impersonating their employees to trick people into investing. It really feels like these scams are getting more creative and more convincing every week, doesn't it?

Rachel MacRae

It does. And if you’re not actively watching the scam alerts from trade bodies and the FCA, it’s easy to fall behind. Regular training for your employees is so important—and I know we keep hammering on about it—but honestly, it’s amazing how many firms still haven’t put a robust verification process in place for emails and calls. Just having a quick check-in with someone before acting on an unexpected email can save you, well, a world of pain.

Unknown Speaker

Exactly, and it goes both ways. It’s about keeping your staff aware but also educating your clients. Fraud is constantly evolving. If you’re not talking to your clients about these risks and keeping them in the loop, you’re kind of leaving them exposed as well. Especially at a time when the FCA has got the magnifying glass out on Consumer Duty and fair outcomes—it’s not just box-ticking, it’s actively protecting people from harm, however that might show up.

Rachel MacRae

Maybe a bit of deja vu for listeners, because we did talk last week about how more and more of these attacks seem to be targeting the industry's weak spots—marketing and operations, not just investment teams. Which is a good reminder that “compliance” isn't just something to bolt on at the back, is it? It should be part of how everyone in the firm thinks and acts, every single day.

Unknown Speaker

Spot on. So regular scam monitoring, employee training, always verifying before acting. And—most importantly—creating a culture where anyone can flag something odd, no matter how small. That’s how you stay on the front foot against fraudsters and protect both the business and your clients.

Unknown Speaker

So let’s round things off by talking about the Autumn Budget, which—if you've been hiding under a rock—the Treasury’s now confirmed is set for 26 November, with new Chancellor Rachel Reeves at the helm. There’s a lot of expectation and, as usual, a fair bit of rumour and, well, doom-mongering floating around. Which always ramps up the anxiety levels for clients, doesn't it?

Rachel MacRae

Oh absolutely, you can feel it building. People start second guessing their holdings, asking if they should move things before the big day. But here’s the thing: speculation is just that—speculation. Last year the whole “PCLS is going” rumour really set off a panic and, in the end…nothing changed. So what do you think Vicky? How do advisers best handle clients getting twitchy when all the hints and headlines are flying round?

Unknown Speaker

Yeah, it’s a tricky one. My usual advice is: breathe! Stay calm and trust the process. No decisions based on media gossip. Wait for actual, confirmed policy details before making any recommendations. It’s all about discipline—keep reminding clients that kneejerk moves can often just lead to poor outcomes or regret. And have a clear process internally, too. Make sure everyone in the firm knows not to jump the gun, so advice issued is always evidence-based and in line with the rules as they stand, not what might happen.

Rachel MacRae

I’d add, make a plan for how you’ll update clients once the real detail is out. If firms have a comms strategy lined up, it takes the sting out of not knowing. And honestly—sometimes just letting clients talk about it can calm their nerves. A bit of empathy isn’t just nice; it genuinely helps people make better decisions.

Unknown Speaker

Definitely. And as ever, we’ll keep a close watch on the announcements, and get the key points out to everyone as soon as we can. So just a reminder to our listeners—don’t react to noise, stick to the facts, and if in doubt, wait for the official details. Alright, that’s all we’ve got time for today. Rachel, always a pleasure to put the compliance world to rights with you!

Rachel MacRae

You too, Vicky! And thanks to everyone for tuning in. We’ll catch you next time with more regulatory updates—until then, stay safe, stay curious, and goodbye!