Hargreaves says the FSA’s decision to announce a major review of structured products is a disaster for financial services and he highlights banks as the biggest seller. He says: “They have shovelled these products since the market collapsed in 2000 and between them and the IFAs the cost must go into the billions. How can products be marketed under the guaranteed or protected income banner when they clearly are not? The products should be banned.”
exus IFA director Kerry Nelson says: “I have seen some horror stories about IFAs and people have to take responsibility for that advice but the biggest culprits in terms of volume, both monetary and for cases, are going to be the banks.
“I think that people did not understand the nature and risk of these products because there are so many different facets to them, that is why they have always been complex and perhaps why they should never have been sold en masse as they have.”
Baronworth Investments director Colin Jackson says the banks’ “over the counter” approach to structured product sales is dangerous. He says: “I think they are probably at risk because you hear about members of staff flogging things to customers when they do not know what they are talking about.”
A Barclays spokeswoman says: “Barclays has always been very careful in its selection of partners for its structured investments business and all our UK products for retail banking customers are backed by Barclays Bank plc.”
A number of banks, including Lloyds Private Banking, sold products backed by Lehmans. A Lloyds spokesman refused to comment.