Picture the scene.
You’re sitting in your office at five o’clock in the afternoon, rushing to meet a deadline, and the phone rings. Just for a second, you consider letting it go on to answer phone. But you don’t. It might just be important. You pick up the receiver and the voice on the other end starts trying to sell you financial advice.
Make no mistake, cold calling is irritating and, in this day and age, potentially damaging to the reputation of the financial advisory industry as a whole.
For the sake of transparency I will declare an interest – our firm has a strict no cold calling policy. It’s not only annoying and counter-productive, we think it’s bad for business. A survey by the UK’s Citizens Advice found that 92% of people do not trust firms that call them out of the blue – financial services firms were singled out for criticism.
At its worst, cold calling opens the door for exploitation of the vulnerable in society. Two in five scams reported to Citizens Advice come from cold calling. Over a third are offering financial and professional services.
That’s why I welcomed the introduction in Singapore of “Do Not Call” rules in January. In its first few months nearly 800,000 telephone numbers have been registered with the DNC Registry and thousands have complained about cold calling. Offenders face a cash fine.
The UK is adopting an even more robust approach. Earlier this month a claims management firm was fined £850,000 after making a staggering six million calls in the space of six months under tough new data protection laws.
In Australia an official at the regulator ASIC said publicly that ‘reputable’ financial services professionals do not generate leads via cold calls.
For some reason the message isn’t getting through. Financial advice firms in Singapore are still getting contact details from third parties and calling them directly. Worse, anecdotally, cold-calling is moving on-line with financial advisors stalking prospects on social media websites such as LinkedIn.
There is something you can do about cold calling. Firstly take your financial future seriously. You probably wouldn’t buy a car or a home from someone who has cold called you. Financial advice shouldn’t be any different. Do your due diligence, check their qualifications, look for a solid track record, seek referrals. Getting the right financial advice is one of the most important decisions you will ever make.
Secondly you can register your numbers with the DNC registry quite easily. By law, unless you have an existing relationship, advice firms should remove your phone details from their call sheets once you have registered.
But I don’t think the answer lies solely with the customer. I believe it’s time the industry moved away from cold calling altogether – whether people register their phone numbers or not. Without an end to cold calling for financial services, people remain at risk of losing some of their pension or paying upfront fees for services which aren’t in their best interest.
A unified industry response on this practice would send a clear message that if you are contacted in this way, the advice you will receive is not likely to be in your best interests and the caller is not to be trusted. As an industry we have a responsibility to protect our clients and potential customers by being the best we can be.
David Pugh is the Director of The Fry Group’s Singapore Office. If you would like to discuss your financial affairs, please contact us.