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Bank advisers attacked in Panorama report

UK banks came under fire last night after the BBC’s Panorama recorded bad practice by in-branch financial advisers.

HSBC, Royal Bank of Scotland and Lloyds TSB were all criticised for the quality of the advice given by their in-house advisers.

A Lloyds TSB adviser was recorded describing the bank’s 2 per cent set-up charge as “market leading”.

Lloyds said: “If our adviser has described our charges as market leading then he has not met our expectations.”

A Royal Bank of Scotland adviser told Panorama’s undercover customer that the bank had a “sale” on its product which was likely to end soon. He also claimed that “at no stage” could the client lose their money.

Bestinvest senior investment adviser Adrian Lowcock described the adviser’s approach as “pressured”.

RBS said: “We take our responsibilities regarding financial advice very seriously.

“However, we shall investigate the matters raised and, if we find there have been instances of customers not receiving clear or appropriate financial advice, we shall take action to address this.”

The sternest criticism was handed out to an adviser from HSBC, who Panorama said failed to complete a risk questionnaire. Instead, he attempted to evaluate the client’s appetite for risk by looking into her eyes.

The adviser said: “Trust me, I’ve been doing this for long enough now. As I am talking to you I am just looking at your eyes, and when I mention the word risk…put it this way, I think we can definitely put a cross through that one.”

Taylor Oliver financial planner Louise Oliver said: “He says that by looking into the client’s eyes he can build up a picture of their attitude to risk. Unless he is Derren Brown, I don’t think he can do that.”

HSBC said: “HSBC and our adviser in question have an excellent track record in providing accurate and suitable financial advice.”

The programme ended by saying customers could “take matters into their own hands” and manage their investments independently.

If you missed Panorama last night you can watch the full programme here.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. And Panorama failed completely (by way of a balance to the article) to suggest that instead of speaking with their Bank, they ought to consider seeking advice from an IFA. The alternative they gave was either speak with your bank for advice or “do it yourself”!!

  2. Julian Stevens 14th June 2011 at 9:37 am

    What the programme demonstrated to me (as I’ve called for before) is the need for the FSA to stipulate that all recommendations must be set out in writing and submitted to the client to read at leisure at least a week before the presentation of any application forms. It simply isn’t good enough for the letter of recommendation to be provided after the investment cheque has been signed and the money invested because, even if the client exercises their right to cancel, they can lose some of their money as a result of a dip in unit prices. Clients should be given the opportunity to decide on the basis of written recommendations BEFORE they write a cheque whether or not they’re happy with the nature and costs of any recommended investment/s.

    Under the present system, once the money’s been invested, there’s an inevitable and probably large degree of apathy, along the lines of Oh well, it’s done now, it’ll probably be okay. As we can all readily recognise, such a methodology is decidedly unsound.

    The letters of rec. that I’ve seen produced by the banks are anything but client-specifically tailored. Rather, they’re little more than a cut-and-paste after-sale chore, very obviously put together by somebody other than the person who’s actually made the sale. That’s not advice, it’s just a stage in a compliance process to get the sale signed off.

    As for the cost of the claims advisor, one wonders just what he did and how much he charged for it. How long does it take to discuss with the client the basis of their grievance, look through the documentation supplied by the bank and draft a suitable letter of complaint? Two hours? Should that cost any more than £300, which isn’t peanuts but it isn’t a fortune either?

    And, if the FOS recognises that many complainants may well need to engage the services of a reputable claims advisor, shouldn’t the FOS awards system allow for a modicum of reasonable costs in that direction, particularly if the initial complaint has been fobbed off and subsequently upheld?

    The rules that the FSA should impose on how investments are sold seem to me pretty clear and straightforward. So why isn’t it implementing them?

  3. I am glad that Panorama made this film but I thought it all a bit mild. I have come across truly stunning cases of bank misselling over the years, and hear from people I know in Bankworld that the ruthless sales machine culture is basically unchanged from pre credit crunch days. I really can’t see anything stopping this – the fines etc are minimal against the profits generated from aggressive sales tactics and in any event, they will end up being paid by bank customers one way or another.

    The thing that always amazes me is the degree that most folk ‘trust’ their bank – I expect if one of these programmes were shown every week, that wouldn’t change much. Only direct experience of the process seems to make people reassess their attitudes. The fact that IFAs were not even mentioned as an alternative is a little odd – perhaps this is because Panorama expect RDR to be an extinction event.

  4. Unfortunatly its going to happen even though the banks have rules and guide lines that need to be followed, and under no circumstances must any pressure be involved from the advisor to the customer. The same cannot be said for the bank to the advisor as staff are pressured to hit set targets each month in order to earn bonus and keep there jobs.

  5. I suggest all IFA’s read the Panorama page on the BBC website and defend their industry on the comment board……URGENTLY

  6. When I joined a life insurance company over 20 years ago, owned by a major bank, the only qualification that I needed was a suit, car and a telephone. There were plenty of leads from the branches and to achieve the targets, the bank was taking on Tom, Dick and Zaroski and did not care where they came from, whether they were plumbers, joiners, secretaries or hair dressers!! Very little has changed since!

  7. I have been employed by a bank Barclays and was put under tremendous pressure to do a “deal a day.They looked for the products that offerred the most commission to them and if an advier didnt hit their target they where managed out of the business.Working now as an Ifa I can see what salesmen the bank wanted Whilst they displayed all the care in the world to their customers the borrom line was the adviser took the brunt if a complaint was made.At one time with profits bonds paid out 8% commission so what did Barclays do construct a league table of all the bad boys who hadnt sold one.
    I dont miss the morning meetings, the daily calls from my area manager and my 121s where my advice was not in question but why i hadnt sold amillion pounds of bond in a particular month. Further to this when Barclays bought out their own structured plans with the Woolwich they where sold in shedloads with in some cases more than £300,000 invested in one plan, diversification?

  8. What this fails to mention is that the FSA are taking legal action against panorama as they only showed clips of the meeting to swing it to look as bad as it could posibly look, for example the HSBC advisor did say the phrase I can tell you dont like risk by looking in your eyes and the body laungage you show when we talk about risk however he then followed that up with the mandatory attitude to risk questionnaire and the meeting was fully compliant after the FSA watched the full tape, however the pressure this caused ruined the advisors career and the distress that his family went through was horrific. If anything the real culprits are panorama, banks have all been tarnished with the same brush yet papers news and other media can influence millions and get away with a 10 second apology for ruining unfortunate peoples lives.

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