Last week’s unusually candid comments from the Financial Ombudsman Service, raising concerns about the increase in complaints over banking advice, tally with evidence that has appeared in these pages over the last year.
The FOS warned of a rise in complaints from elderly people about unsuitable investment advice given by bank advisers.
It expressed particular concern about consumers who were looking for a deposit or savings account ending up taking out an investment where their capital was put at risk.
Time and again over the last year Money Marketing has highlighted the concerns of IFAs who have had to mop up the mess the banks have made of their clients’ finances.
From November, the FSA will take on all retail banking regulation for deposit-taking and payment services from the Banking Code Standards Board. But the FSA is already in charge of the regulation of banking advice and at present does not seem to be taking its job too seriously.
In response to the concerns of the FOS and calls from Aifa for an investigation into banking advice, the FSA says it will factor complaints into its usual supervision of firms.
But this is not good enough. The press has been full of examples of poor banking advice and, coupled with the concerns of the FOS, the time has come for the FSA to get tough with the sector.
The response from the British Bankers’ Association to such concerns is particularly grating. A spokesman says there are “a relatively low number” of complaints compared with the number of savers.
This complacent attitude fails to take account of the number of complaints that have yet to reach the FOS or which have been quietly dealt with by the banks whilst showing no regret about the bad advice being uncovered.
This week’s issue contains comment from Friends Provident chief executive Trevor Matthews comparing the bancassurance sector in the UK unfavourably with its Australian equivalent.
The impression being given by the regulator at present is that it is coming down on IFAs like a ton of bricks but failing to get to grips with the standards of advice being offered by bank advisers. This cannot be allowed to continue.