Sunrise Homes Expose Elderly to Commission Hungry Advisers, Claims Xentum

MANCHESTER, England - Luxury care homes for the elderly chain, Sunrise, has been slammed by a leading wealth management company for providing a platform for ‘vulnerable’ residents in its homes to receive advice from a financial adviser who is not truly independent.

The accusation comes from Dominic Baldwin, head of Cheshire based wealth management company, Xentum, and one of a select number of advisers who provide independent advice on a fee basis and are not subject to the influence of product providers.

Sunrise has been accused of failing to protect the best interests of its elderly residents by permitting senior advisers from St. James’s Place, a leading provider of financial products, to give a series of financial seminars at a number of its care homes on 1 October.

The basis of the criticism is that St. James’s Place does not provide independent advice, offering only a restricted range of products from which its self-employed salesmen ‘partners’ can earn substantial commissions.

Sunrise has 27 homes in the UK which are predominantly clustered around the south, midlands and north west. All are hosting the seminars dubbed “Finance and Legal Matters”, with 11 headlining speakers from St James’s Place.

Xentum, a leading member of the financial advisers’ trade body, SIFA, is one of the few firms which already complies with new criteria laid down by the Financial Services Authority which every independent financial adviser will need to adhere to by 2012.

Dominic Baldwin’s decision to take issue with Sunrise over this event was sparked by receiving an invitation to the event where the St. James’s Place speaker is billed as providing advice on “funding care through investments”, “consolidation of financial affairs” and “financial solutions for long term care”.

He found himself on the invite list as he had recently visited the local Sunrise home to check out its suitability for his elderly father. “Obviously they were unaware of what I do, or I probably wouldn’t have received the invitation,” he says.

“However, I found it impossible to comprehend that Sunrise - which claims that it leads the market in its care for the elderly - could ask a representative of St. James’s Place to effectively provide what on the surface appears as independent financial advice but will be skewed to its own products.”

He believes that Sunrise has failed to protect its vulnerable and potentially wealthy residents by not ensuring that any financial advice to which they provide access is independent.

Dominic Baldwin cites a recent case where one of St. James’s Place partner companies, Andrew Davies Wealth Management, was forced to return some GBP95,000 to a pensioner whose GBP250,000 nest egg collapsed by 34% because of risky investments.

This involved Molly Richards, a 76-year-old from Mid Glamorgan, who was looking for a safe home for her life savings and the inheritance from her late partner, a Second World War veteran.

Instead, her money was invested in commercial property - even then a failing sector - and in the Far East. The end result was her savings were reduced by GBP84,000, while her adviser picked up commission of GBP15,000.

Taking advice from the “This Is Money” web site, Molly, an admitted novice in the investment world, sought and won immediate redress from the firm including interest of more than GBP11,000.

A chartered financial planner who reviewed the case described the advice received as “totally incompetent” and said no allowance “seemed to have been made for her age or attitude to risk and the exposure to commercial property simply beggars belief.”

St. James’s Place business development director David Lamb later issued a statement saying it was clear that “Mrs. Richards did not fully understand what she was investing in.”

“I am not suggesting for one moment that the St. James’s Place spokespersons are not experts in their field,” says Dominic Baldwin. “But the one thing they won’t be giving the elderly residents of Sunrise is independent financial advice.”

“And that is an issue that Sunrise must address if it is to maintain any credibility in the seminars it is holding for residents. It also throws up the wider issue of choice and control. These residents are almost passive in the decision to listen to this advice and it is a concern in these financially turbulent times.”

Note to Editors Sunrise Homes holding seminars on October 1st featuring spokespeople from St. James’s Place - NORTH WEST Sunrise of Hale Barns, Sunrise of Bramhall, Sunrise of Mobberley WEST MIDLANDS Sunrise of Tettenhall, Sunrise of Edgbaston, Sunrise of Solihull, Sunrise of Knowle SOUTH WALES Sunrise of Cardiff SOUTH Sunrise of Fleet, Sunrise of Weybridge, Sunrise of Esher

Xentum offers advice on personal financial strategies. It charges pre-agreed fees for its services, rather than generating its income via initial commission from product providers, as is mainly the case in the sector. All work is signed off by a chartered financial planner and if the company cannot add value to an individual’s financial situation it will not make any charge for its services.

For more information please contact: Dominic Baldwin on +44(0)7973-630-551

Source: Xentum

For more information please contact: Dominic Baldwin on +44(0)7973-630-551