Theresa May’s embarrassing ‘dementia tax’ U-turn shows that even politicians and experts make mistakes with financial planning.
The principle was to make the people using the service pay for their long term care by having a day of reckoning with the government as well as a higher authority on death.
The government would then settle any care bill from the estate, but the first £100,000 would be exempt from the tax-grab.
The episode shows how complicated tax and financial planning has become.
Suddenly, everyone’s an expert regardless of their experience and qualification.
Not many people rate their financial advisers and most rank them with estate agents and traffic wardens as a necessary evil.
But working with a regulated financial adviser does come with some benefits.
They are trained and have to sit an exam to gain a licence to offer clients financial advice.
With that licence comes a responsibility to offer best advice and to keep to the rules.
Those rules says that if the client has a complaint about the adviser that is unresolved, they can go to an independent ombudsman who can censure the adviser and order them to pay compensation.
Regulation also means the client can go to the Financial Services Compensation Service if the adviser goes to the wall.
The system is by no means perfect, but offers some confidence about advice and levels of service to clients.
Snake oil salesmen
Books, self-help videos or seminars offered by the modern equivalent of snake oil salesman out to relieve their marks of as a much money as they can as quickly as possible provide do such fail-safe as an ombudsman.
Expats in particular have to watch for sharks.
The latest UK Financial Conduct Authority business plan includes more resources allocated to tackling scammers and fraudsters.
Expats can fall between the cracks if they are looking for financial advice overseas unless they approach a reputable and regulated international financial advice firm.
They need to watch for an adviser who has the right qualifications, a licence to offer advice, and back-office that can cope with cross-border tax, estate planning and investment. Qualifications and financial advice rules can also differ between countries.