FCA chief executive Martin Wheatley has set out concerns about the quality of bank advice and warned that banks must work for the best interest of customers.
Speaking at a British Bankers’ Association conference in London, Wheatley said there were many examples of bad practice among bank advisers, among them the sale of five year investment bonds to people “not expected to live past the next world cup”. He said that he wants them and the rest of the industry to “work for the consumer”.
He says: “When a customer looks to you for investment advice, it should never be just an opportunity for your adviser to see their sales commission looking back at them rather than an actual customer with real needs. What our customer expects is for your adviser to look at their personal circumstances, what their goals and aspirations are, and how much they are prepared to risk and then come up with something that is appropriate for them.
“These are simple things, but it is about the customer being able to trust you and know the advice process is working for them. This is the culture that I want running through your firm and through the industry – we all have to be working for the consumer.”
He told the conference that the product intervention powers the FCA will have will improve the quality of products. He said it would cause designers to identify a target market and create a product that suits their needs, to test the products to ensure they deliver fair outcomes and to have a robust approvals process in place through which the products go before they are sold.
He added: “And finally, that you monitor the product to see who is buying it and how it is performing. This is not just about selling it and moving on, but taking an interest in how it is actually working in practice.”