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Barclays chief’s advice claim sparks a clash

Barclays global retail banking chief executive Antony Jenkins has been accused of “living in a parallel universe” after he defended the banking sector against charges of misselling and high-pressure sales tactics.

At a Which? Future of Banking Commission hearing earlier this week, bosses from high-street banks gave evidence to the panel, led by Tory MP David Davis and Treasury select committee chairman John McFall.

Which? said it has amassed many examples of customers not being treated fairly by highstreet banks when sold financial products but Jenkins argued that these cases are in the “minority”.

He said: “Misselling is a very serious problem but there is absolutely no benefit at all for us to sell a product that the customer neither wants nor needs. We want a long-term relationship with our customers.”

He said when he visits branches, he finds colleagues are “very keen to get the customer the right product” and “might even raise things to their attention like, do you have enough life insurance? I do not claim perfection but we have a good culture and we put the customer at the centre at everything we do.”

But Capital Economics managing director Roger Bootle said: “It seems like you live in a parallel universe. We have lots of evidence from members of the public of what the banking experience is like and then we listen to you and it sounds like Barclays is something like the Samaritans, all cuddly and friendly. This does not quite gel.”

McFall said he had personal experience of “aggressive selling” by Barclays of payment protection insurance, which prompted the TSC to look into the products.


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There are 35 comments at the moment, we would love to hear your opinion too.

  1. That’s funny, whenever i go into Barclays to pay money in they always try and sell me a current account that charges a monthly fee with no benefits that are any use to me. I feel that staff are very keen to sell me a product they’ll get commission on.

  2. Funkmeister Sants (Bonus) Appreciation Society 19th March 2010 at 9:23 am

    He is one of the ‘Gods of the Universe’ and so IS ENTITLED to live in a parallel universe.

    Obv. not in the same one we live in. Hey ho.

    I’m sure Funkmeister Sants will no doubt ‘not comment’ on the mis-selling/high pressure sales issues. (They’re the Banks business … after all)

  3. Funny that, a friend of mine, Bank Manager, left a Hight Street bank after 20 years as he was, “fed up being forced to sell inexpensive and inappropriate products to people who did not want them, need them or could afford them”. Perhaps these people (who will probably end up at the FSA anyway) should speak not just to their clients but their staff – and then sack them for not reaching their targets….. Grrrrr

  4. I opted to take VR from a Barclays sales management position at the end of 1999 after over 20 years. They paid me a lot of money to leave and I was glad to do so.
    I can categorically state that we were targeted for PPI peneration (percentage of PPI policies to the total number of loans) at around 70%. We were even given the strategy of “greed” as acceptable – e.g. selling PPI to a member of the Emergency or Armed Services on the basis that, in the event of illness, they would be paid twice. Of course, the redundancy cover (which used to be included with no option to detach it) for these and others was totally useless, given that the only likelihood of job loss is gross misconduct sacking or resignation, neither of which is covered.
    I am now an IFA, having served an apprenticeship as a tied adviser (NOT bankassurance, I hasten to add) and I am all for a genuine exploration of clients’ needs, but the products have to fit and be appropriate or there is no sale. I admit, however, that I am ashamed of my sales time with Barclays.
    The parallel universe claim by Roger Bootle is spot on – and it has been like that for years. However, I would add that they are all the same; my experience with applying for jobs as a bancassurance adviser (none of which I wanted once I had sampled their cultures) tells me that. You couldn’t put a fag paper between any of them!

  5. As an ex building society mortgage advisor I was the person in the branch that could cross sell every product. The pressure was immense, and questions were asked if targets were not met, 121s were marked down and I was left feeling very frustrated. As someone who enjoyed doing right by the customer I left pretty quickly.
    Perhaps these targets should be removed completely and advisors rewarded for doing right by the customer!

  6. Five friends and family members have been “advised” by Barclays.

    Obviously, they have been sold five entirely inappropriate ‘product solutions’, which just happen to have high up-front charges and pay absurd levels of commission.

    Fortunately I have assisted in writing complaints and all five have been upheld. No doubt these represent “the minority” referred to by genius boy Jenkins…

  7. I recently visited my local Nat West branch to open a additional bank account. For almost an hour the assistant tried to sell me various products and services before asking me to sign to say no advice had been given, customer instruction..

    Based on my experience the banks are in a sales system and dont know that what they are doing is hard selling or indeed that there is an alternative sysyem, its a culture problem.

  8. We all see the stats about the banks and the claims that go to FOS but this is just the tip of the Iceberg.
    If the FSA published the list of complaints against the Banks reported in the banks own returns to the FSA, there would be huge embarrassment to both the Banks and the FSA.
    The Banks are currently rolling over and paying the majority of complaints to reduce the figures on the claims referred to FOS in an attempt to improve their image.
    I’m also convinced the Government has told the FSA to go lightly on the Banks to enable them to get back into profit for political expediency.
    Why else have the FSA allowed the Banks to flog structured products to client with total disregard to compliance requirements and done nothing when this has been reported in the press for more than a year.
    When are the FSA going to smell the coffee and wake up.
    In the arena of Financial Advice, big business just does not work , because ultimately the client does not get a regular personal service with a long term commitment from the adviser.
    Forget accountability and all the regulation you like.
    Ultimately clients only get good service from IFA’s that care about and take a long term commitment to their clients.

  9. Paul Rutherford 19th March 2010 at 9:47 am

    “…colleagues are very keen to get the customer the right product…” – again somebody else who can’t differentiate the difference between advice and product sales.

  10. #Tim Kelsey – am guessing you are an IFA, so you probably do the same? Is that not what businesses do? try & sell you something to make money??

  11. I used to work for them back in 2001-2003, and we were actively encouraged to sell corporate bond funds to customers who were disappointed that interest rates were not good on savings. None of the training covering Corporate Bonds mentioned the disadvantages of falling interest rates and the effect on the customers capital.

    If you did not sell them you were managed out of the business. I left to become an IFA and I could then offer a full range of solutions.

    I have a client who in 2008 took a secured loan over 7 years and was persauded to take a lump sum PPI policy eventhough it only covers them for 5 years, no alternative was discussed or put in place.

    Presently got a complaint going on with them and Barclays say nothing wrong as client understood this. So what they should have been sold a 7 year policy not a 5 year one.

    It happens in all Banks as my wife worked for Nat West & HSBC, and we have friends who work for Lloyds. No different in them all.

  12. God's Poor Orphans 19th March 2010 at 9:54 am

    What’s new! 12 years ago when I used to meet regularly with local “movers”, Police Inspector, Bank Manager, Shopping Centre Manager etc. The Bank Manager resigned as the stress of meeting Sales Targets was unbearable for him, a man with principles and a belief in traditional values. Not making enough money from the interest on our money eh?

  13. An elderly lady client of mine visited Barclays Bank to move some funds from her deposit account to her current account to cover a cheque she had given me for an investment and she was told at the counter that she had to see one of the banks financial advisers first or they could not transfer her funds.

  14. An elderly low risk client was previously advised by Barclays to invest their life savings and property (downscaling) sale proceeds into a largely equities based portfolio that was meant to provide income as the main feature. The ‘factfind’ stated this, the adviser ignored it and sold an inappropriate portfolio. Client questioned this and was told to sell and reinvest in another (new service) portfolio, again not exactly income geared but using 5% withdrawals. Guess on what basis ……………… large initial commission on both occassions and with no review service.

  15. The “sales” have to be worth something long term to make them profitable. The sales culture in the banks is mainly numbers, and that suits them, but is absolutely useless to an IFA.
    It’s laughable really but just to prove a point, as a “retail bank manager” of some experience and a history of success, for a high street bank, I remember a day when an Area Manager phoned me 12 times to check how many SAYE accounts I’d opened for £1 that day, and another day when he threw the phone at the wall in my office because he wasn’t satisfied with those numbers.
    It was the same with opening current accounts for £nil – why – numbers of course, but useless and something like 85% remained dormant and where eventually closed.
    I phoned an ambulance for him!

  16. Yesterday an IFA i deal with saw a longstanding client who has over£30k in his bank account.His bank rang him about it and siad that having such a large amount in his current account meant it was at greater risk.This was a ruse to get him to invest it with them and earn commission but it frightened the client.How can they get away with this type of pitch?Because the FSA have no interest in stopping it.It should be a written complaint, but what will they do about it…nothing.Thats what happens when Banks staff are target driven and are put under extreme pressure.

  17. I have a client who borrowed money from Barclays to extend and refurbish his home. Although he is retired he has a pension and three part time jobs, any of which could finnish at any time.
    He finished the work and had only spend 50% of the borrowed money so he went into Barclays and asked to repay 50% of the mortgage loan. The
    bank financial adviser strongfly recommended that he purchase a 5 year fixed rate bond with the money instead of repaying 50% of the variable rate mortgage.
    By the tiome I found out it was too late and the client is too embarrassed to make a complaint.

  18. Funny really….how can anyone in their right mind expect the FSA to remonstrate with the banks…doesn’t everyone realise that the people at the FSA retire it is to take a ‘non-exec directorship’…..with a bank!
    There is no way that the FSA will bite the hand that will feed them in the future.
    My client was told by NatWest that the life-insurance proceeds in her account should be transferred to another account ‘for safe-keeping’ over Christmas until she could pay her mortgage off in the New Year. What was the new account? A five-year fixed rate with high commission and high clawbacks over the five years!
    When she asked for her in the New Year, she was told that there would be a 7% penalty. She asked the original adviser about this and they said, ‘I wasn’t aware of any penalties’! Fortunately this was by phone, so the call was recorded and when the client asked for a copy of the recording, NatWest agreed to refund all her monies with no penalty..Funny that, isn’t it.

  19. The banks start bleating about a new supervisory regime that they never had before?

    Mr Jenkins is evidently in denial or else he is ignorant of what goes on at the bottom of his pyramid.

  20. Recent case involved Nat West acting as “Trustees” for a client’s funds left to her by her father. They were charging her both as a Trustee, and as a DFM. Guess what, virtually ALL the holdings were Natwest funds or products. Will be intrigued to see how this complaint is met.

  21. Thank God I am Out Of It 19th March 2010 at 10:46 am

    I recently worked for Barclays. The pressure was immense as you are judged month to month. I knew 1 adviser who qualified for a holiday one month and ended up on a “Performance Improvement Plan (PIP)” the next!! for failing to hit a target. A PIP is the start of the process to manage you out!

    Its a pity with Barclays as they do have some good products and advisers. It all comes down to GREED i’m afraid.

    As for the FSA have they really just woken up to this!!??

  22. How much do the FSA owe the banks? Difficult to regulate someone you owe money to .

  23. Five friends and family members have been “advised” by Barclays.

    Obviously, they have been sold five entirely inappropriate ‘product solutions’, which just happen to have high up-front charges and pay absurd levels of commission.

    Fortunately I have assisted in writing complaints and all five have been upheld. No doubt these represent “the minority” referred to by genius boy Jenkins…

  24. Does anybody remember the ex-CEO of Prudential at the time of the Pensions Review? – Watch this space!!!

  25. What you need to know is that Mr Jenkins used to run Barclaycard which was considered out so control by group compliance that they put their own person in.

  26. Isn’t it about time that some of Barclays senior management did some mystery shopping of their own? I suspect they have no idea/turn a blind eye to what is going on.

    All IFAs come across the poor selling practices (and little or poor advice) and it shames us all. However the FSA should be the ones hanging their heads over this because they have known for years but did nothing.

    Lets hope it know changes – and not before time.

  27. The tales of high pressure selling of expensive, heavy-commission and frequently inappropriate products are legion. Yet only now is Hector Sants suggesting that the FS might take a look at some of these practices.

    The fact that the FSA has DELIBERATELY looked the other way for so long, despite the all but deafening clamour from the industry about this constituting wilful favouritism of the banks is so beyond any standards of fairness, integrity or honesty that it cannot be encapsulated in polite language.

    Still, if you resign from a bank because you don’t like the pressure, go work for the FSA (the interview should be no more than a formality). There, you get your bonus every year regardless of whether or not you manage to meet any sort of target.

    The stench of corruption is nauseating.

  28. # Anonymous 9.48am

    I’ve nothing against people selling things to make money, that is what everyone tries to do. I just think its not TCF to make money selling products that are no use to clients, i think its better to sell them products that assist them in their needs. I’d hope the FSA would agree!

  29. Anon 11.56

    Please tell me Mick Newmarch has
    decided to remain a nightclub bouncer and not to re-enter the financial services arena. That would destroy my love of irony.

  30. It is wrong to sell inappropriate financial products. It is completely inconsistent with ‘treating customers fairly’ but the fines are obviously not enough to stop Barclays and others from selling them. And Barclays has no incentive not to – as long as they give appropriate warnings and do the paperwork they can get away with it and hope the customer is too embarassed to complain.

    What needs to happen is truly penal penalties for both the sales staff and Banks. So, if they sell an equity based product to someone who is retired and wants a ‘low risk’ they should expect to compensate the customer anything they would have lost versus investment in a ‘safer’ savings account and they should also be fined 10x the commission they earned. Maybe then they would realise that treating customers as money making machines is not sustainable or ethical.

    Unfortunately you can’t break the cycle without getting heavy and banks have to make money to cover the cost of their branches – customers are going to have to get used to paying bank charges if they don’t want to be sold rip off insurance and investment products instead.

  31. Baron Bolligrew 19th March 2010 at 6:34 pm

    The comment from ‘Anonymous’ regarding companies that mis-sell financial products brings two things to mind:
    1) This emphasises that the vast majority of the financial services market is ‘transactional’ based, i.e. my advice is only paid for if you take out a product.
    Whilst there is a place for this I think the real place for IFA’s is to be paid for the advice. Everyone keeps quoting how people will pay for solicitor/accountant’s time but not financial advisers time and this is where we have to educate the client…Maybe we can get the FSA/HMRC to sponsor a marketing campaign, with adverts on tv/radio/newspapers re-enacting horror stories of people who’ve ‘DIY’d’ their financial sitaution or taken advice from inappropriate sources (the guy down the pub/newspaper article/random internet site/person in the bank) and screwed up. They could then show how easy it is to find an adviser, showing the kind of qualifications we have to have, regulations, etc.
    2) Penalising rogue sales with a penalty of 10 x the commission earned will decimate the financial services industry and I emphasise that it’s the FINANCIAL SERVICES industry and NOT the banks that will be decimated. The banks can afford to pay 10 x the commission earned from rogue sales as they will only ever get caught on 1% of rogue and inappropriate sales. The banks have cleverly got themselves into the general public’s psyche as being ‘solid, dependable, reliable and trustworthy’. Any rogue or inappropriate sales are by rogue staff who are strongly reprimanded, blah, blah.
    As we’ve seen from comments made and from our own knowledge, the intrinsic atmosphere of target performance will still be endemic and will continue.
    I’m sorry but I see that as the truth. The FSA will kill off this industry and, unfortuantely, I am stuck in it. I’m swotting like mad to satisfy a qualification that does absolutely nothing to secure my future income nor does it achieve anything better for my clients. Spending all that time doing that means that I don’t have the time to re-train in anything else.
    Would I encourage my kids into this industry? Hell no…I’ve encouraged them to become trainers/educators and I would encourage them to be compliance but never be an adviser!

  32. Never Too Old To Rock 19th March 2010 at 6:45 pm

    ‘Shake Your Money Maker’—–Fleetwood Mac.

  33. I have my personal accounts with Barclays, and yes, they have from time to time suggested I look at products. It does not take much common sense to weigh up the pros/cons, you do not have to be a qualified adviser to do this.
    Me – I’m happy with them doing this as their top packaged current account works out as fantastic value!
    Stop moaning, all you guys will try and advise your clients to purchase as many products they can budget for, that they need. Agreed some of their products are not as good as others, but that is not the fault of the mortgage adviser/counter staff – if you have a problem with this your problem it with distribution channels in general. Barclays know they will not achieve long term rewards if they mis-sell. Get over it

  34. Jeremy Williams 13th April 2010 at 11:15 am

    I am a financial adviser for Barclays currently.I agree with a lot of the comments and I am in the process of resigning in the next few days.
    I believe that financial advice is a wonderful career and it can really, when done properly, be a very highly paid job AND help a lot of clients. It’s about long term relationships and not instant quick hits from month end to month end.
    Mark my words: the next big scandal 3-5 years from now will be Structured Products. Especially those currently being marketed as fixed rate 5 year ISAs. A lot of cash ISAs have been transferred into them that, in my opinion should NOT have been. They are not covered by the FSCS, can never be reverted back into cash, do not pay higher returns than some fixed Cash ISAs available with other banks…and many more reasons making them unsuitable for the purposes they are being marketed for. I have turned away a lot of appointments booked in for me and sent them to the likes of Santander etc, who in my opinion have good rates for clients wishing to transfer CASH ISAs. Basically, I have been working like an IFA….which my boss has not been to pleased about, because money has left Barclays as a result. Personally, I am disgusted with the TCF double standards. Enough said on that point.
    Strutured products do have a place in balanced portolio and can play a valuable part. However, in the vast majority of cases , they are being missold. I hope Barclays leaders higher up are really ignorant of that fact, as opposed to turning a blind eye.
    If I had a heavy influence over today’s media, I would address this situation publicly, and advise everyone to visit IFAs, pay a fee, and get the advice they need (As I am resigning from Barclays to become an IFA).
    I urge the FSA, the Government etc, to put a ban on Bancassurance Planning Managers from calling themselves ‘Financial Advisers’ to the general public. This will enable the unsuspecting client to clearly distinguish between the two.

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