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Commission questions to answer over Barclays


As a small IFA who feels that the FSA continues to target small firms unfairly while paying lip service to the banks, it is interesting to note that the final notice sent to Barclays on January 14 by the FSA makes no reference to commission, sales targets, sales incentives, etc.

At a time when advisers are being forced by the RDR to charge fees rather than take commission, surely the FSA should have investigated what commission was payable by Aviva, how Barclays’ advisers were remunerated and whether branch staff were incentivised to hit sales targets.

Point 4.3 of the final notice confirms that Barclays Financial Planning operates on a multi-tied basis. It would be interesting to learn what other alternative products to the two Aviva funds were available. If alternatives were available, did they pay the same commission as Aviva?

If the FSA seriously believes that commission is a factor in misselling, surely these points are relevant.

As a business owner, I firmly believe that the only advisers/salespeople who are entitled to take commission are businessowners. Salespeople working as employees of IFA firms, banks and other institutions should be paid a good salary. They should not be under pressure to hit sales targets to earn a decent income.

Bob Perry
Chartered financial planner

Web comments
Reaction to online story headlined, FSA fines Barclays £7.7m for advice failings

How many of the sales were down to advisers on targets which were then chased down by sales managers, regional managers, area managers and by the “bosses”? At least the FSA recognises that it was down to “sales staff” and not advisers, which just about sums it up. Are we finally getting somewhere?
John Hutton

Unfortunately, fining banks does no good as they can cover the cost from other operations. A similar level of fine would close an IFA practice. Until they start removing their permissions to give “financial advice” there is no incentive.
Sean Kelly

Where does the buck stop? If I had approved these sales, I do not doubt that my 15-year-old IFA practice would be closed down. That is why small, directly authorised firms pose little or no risk to the investing public. Someone at Barclays was responsible for this shoddy debacle. Follow the audit trail.
Simon Kershaw



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. And just what service did Barclays propose to offer in return for trail commission reportedly inxs of 1% p.a.? None at all. Of course, elements of the RDR will address this but, from what I’ve read elsewhere, it looks eminently possible that the banks will find a way to exempt themselves from the great bulk of the RDR.

    I don’t know whether these two Aviva funds were sold as Unit Trusts or via Investment Bonds, but what we do know for certain is that the vast majority of investment products flogged by banks are the latter rather than the former. All other things being equal, that alone constitutes sub-standard advice. Their other favoured products, of course, are fixed term structured products investing in some crappy Managed fund with no track record with a capital guarantee at maturity and 7% commission. And yet the majority of the public are still under the impression that what they’re getting from these institutions is good advice. They’re not. All they’re really getting is a target-driven product-flog. How is this supposed to accord with the FSA’s claimed objective of encouraging competition, value for money, good product innovation and higher standards? It doesn’t.

  2. 29th January 2011 at 2:51 pm


    ‘Director of Barclays Wealth Colin Dickie explained: “IFAs are extremely important to our business and it is crucial that we continue to develop products which they – and their clients – really need.”

    He added that their assistance will ensure that the firm can remain in step with the requirements of consumers and the current market.

    Barclays Wealth aims to help its clients by providing guidance when it comes to their finances and employs over 6,900 individuals in 20 countries.’

    it’s such a shame their gone…

  3. Mr Perry. The advisers did have sales targets but the credit that was given to the advisers for all investments sales was the same, no matter what the product. This was to stop the bias towards one product. An adviser typically earnt a salary of £32,000 and had to average more than £15000 per month commission to earn any bonus, which was rare. It is the banks greed and lack of training that causes the mis selling not adviser bias.

    I used to work for them until a few years ago and feel that I now provide clients with a much better service because I have the time to do so rather than chasing appointment targets. I have many friends who are still with BFP, who have large mortgages, young families and people just do not think about them before spouting off from their High Horse!

    Why do you feel the need to write Chartered Financial Planner after your name – it does not give you a right to tar a whole group of people with the same brush and we all know that it does not mean one adviser is better than another. Yes I do have the qualification, and yes I am an IFA but it does not put us all into an elite club.

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