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Banks are slammed for selling structured deposits to mass market

Which? says structured deposits are not suitable for the mass market and claims banks are selling the products when simple savings accounts would be more appropriate.

At the Building Societies Association annual conference in Birmingham last week, Which? Money editor James Daley said the consumer champion is concerned about how banks sell structured deposits.

Speaking to Money Marketing, Daley says: “Front-line bank staff are still incentivised to sell products that are unsuitable for clients. We know that as a fact and they are advertising returns that are hardly ever achievable.”

Daley says structured deposits should only be sold to customers that have received advice.

He says: “We want to see structured deposits brought into the advised regime.” Informed Choice managing director Martin Bamford says: “I agree entirely. I think they are very complex products that are often unsuitable for inexperienced investors.

“Where we are seeing the banks selling them en mass as an alternative to savings accounts, it is, in most cases, wholly unsuitable.”

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  1. Julian Stevens 17th May 2011 at 9:23 am

    And how is this any different from the banks selling non-structured products en masse to all and sundry without establishing full suitability? One only has to recall Barclays’ campaign that resulted in thousands of their customers having their cash life savings shovelled into those two Aviva Unit Trusts which swiftly fell in value by up to 50%. What proportion of life insurance policies sold by banks ever find their way into trust? And how many IHT mitigation strategies devised by bank sales people ever arrive at any solution other than a joint life second death Whole of Life Assurance policy? How many retirement savings strategies presented by banks ever discuss ISA’s vs. pension plans?

    Which? may like to imagine fondly that it has its finger on the pulse of practices likely to lead to consumer detriment, but the bottom line is that most advice from most banks on most products is driven by sales targets above all else.

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