If the WIA is to succeed it has to offer credible and robust protection to investors and enjoy broad support amongst the fine wine sector.
Companies with a turnover of £20 million and above are regarded as a lower potential risk and will be allowed to self-certify their compliance. It remains to be seen if investors will find this reassuring.
The use of cold calls and the associated high-pressure sales have blighted wine investment. The vast majority of the many people over the last 15 years who have either been defrauded or pressured into buying unsuitable or over-priced wine investments have been recruited through cold calls. I have seen all too many examples of where elderly and vulnerable people have sunk all or a substantial part of their life savings into wine investment. Almost invariably this has started with a cold call and the victim has been persuaded to trust a stranger at the other end of the line. Then the process of milking their savings begins.
I note that of the four founders and their companies only Albany Portfolio Management Ltd has publicly stated that they do not cold call.
If the bar is too low then it will be tempting for dubious investment companies to apply to become members of the WIA and use their membership as a trojan horse to provide false reassurance to their existing and potential customers. This would also discourage companies who do trade professionally and use best practice from joining the WIA.
Real trading addresses: In addition to the company's registered office, the company's actual trading address should be clearly visible on correspondence, websites etc. If a company actually trades from a serviced office this would be acceptable but not if it is used as a virtual office and the company actually trades from another undisclosed address.
The WSTA (The Wine & Spirit Trade Association) has confirmed that their view, based on legal advice received, is that wine in bond is subject to the Distance Selling Regulations and that the cancellation period (seven working days) starts from the day after delivery. I gather that the directive will shortly be revised and that the cancellation period will be extended to 14 days and is likely to come into operation in November 2014. The position of the right of cancellation regarding en primeur will at long last be clarified.
Wine a minor part of a portfolio: The WIA website should advise that wine investments ought to only make up a small percentage of a savings portfolio.
Amending the Code of Conduct: The process of amending the Code of Conduct needs to be explained as well as how any such changes of made public.
30.11.12: Pleased to see section on cold calling quoted in the Financial Times here – an artlcle by Geordie Clarke.