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Parliament protest and BBC pile pressure on Barclays advice

Scores of elderly Barclays clients protested in Parliament this week about the investment advice they received from Barclays.

Meanwhile a BBC docomentary, to be screened tonight, will also shine a spotlight on the financial advice given by the bank.

More than 80 former Barclays clients gathered at Westminster on Tuesday to tell MPs about their losses after Barclays salespeople advised them to invest in the Aviva global balanced income fund.

In April last year, Money Marketing revealed Barclays advised cautious clients approaching or in retirement to transfer their long-term savings into the single specialist fund.

The value of the fund plunged by almost 50 per cent in the 12 months to March 2009 and the bank admitted it erroneously categorised the fund as balanced rather than adventurous between July and November 2007.

A BBC2 programme, How to Beat Tough Times: Money Watch, will tonight highlight problems investors have faced after taking financial advice from Barclays.

Conservative MP for Wimbledon Stephen Hammond, who chaired the meeting in the House of Commons, urged other investors who have lost money because of Barclays’ advice to contact their MP.

Other MPs that attended the meeting included Conservative MP for Daventry Chris Heaton-Harris and Conservative MP for Mid Norfolk George Freeman.

No one from Barclays attended the meeting, but a spokesman says: “It is clearly evident that in some instances relating to these funds, we have failed to meet the high standards that our customers expect from us.”

For the full story, plus pictures, see this week’s issue of Money Marketing.

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Comments

There are 19 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 21st July 2010 at 4:37 pm

    It’s a pretty appalling indictment of the FSA when more than 80 clients have to protest outside parliament due to lack of action on the part of the regulator. Were an IFA firm or a network the guilty party, one of Hector’s Hatchet Squads would be down on it like a hundred tons of hot bricks ~ wouldn’t they?

    Will a spokesperson for the FSA be appearing on tonight’s BBC programme to explain why it [the FSA] has failed to act? Or will it be another case of “No one available for comment”?

    And still we know not why the FOS adjudicators were given “special training” on how to handle complaints against Barclays. Anyone?

  2. Can’t expect the FSA to act if it might damage their career prospects.

  3. This issue is not just related to one product. I am currently dealing with a Barclays client, horrified that his investment has made no money over the past 5 years. He tells me his adviser told him that his investment would “do very nicely and make a good profit”. Sadly, many people still trust the banks. This trust is sorely misplaced.

    His adviser was driving a brand new red Porsche at the time.

    The problem is that bank salesforces are target/commission driven. Their number one priority is not necessarily what’s most suitable for the client.

  4. Not only Barlcays and banks in general that engage in this sort of practice though.

    Apparantly there are a fair few ‘advisory’ firms that are falling very short of Treating Clients Fairly.

  5. Now then FSA….will you please all be big enough to acknowledge that banks do NOT offer advice….they SELL products…

    ….if you don’t believe this to be true, don’t ask the bosses who will just fob you off over an expensive lunch….ask the poor sods whose line managers harangue them to sell, sell, sell at the counter, to meet the targets set by those at the top……

    If these poor 80 people who were protesting, had been subject to such appalling treament by IFAs….(a) the business wouldn’t have got past the compliance stage – it would have been thrown back at the adviser….(b) there would have been a public outcry of huge proportions and (c) perhaps most interestingly, we’d have the FSA trumpeting the fact that they were going to take those advisers to the cleaners and back, banning them from the industry and levying massive fines…..

    ….and to think that a massive majority of FSA people are on BONUSES for this kind of monumental failure….this is no longer a regulatory OR Governmental issue….it’s far more important than that….this is an issue of enormous and fundamental national importance to the financial well-being of citizens in this country….come on Hector et al…no more hiding places…….it’s all out in the open….it’s on BBC, by the way….

  6. To be fair [sic] to Barclays, it’s not just them!

    I have seen several people who have been handsomely striped up by sellers from Lloyds TSB.

    In one case a woman who can barely read is having to carry on working to pay off the loan and PPI she was ‘advised’ to take out to as the APR was cheaper than an existing loan.

    It wasn’t and there were early redemption charges on the existing loan. The capitilisation of the PPI on top of the loan and interest added to it added 35% to the loan.

    Lloyds rejected her complaint on the grounds that their staff are trained to do things properly and in any event she’d signed the various documents the seller had shoved under her nose.

    It’s now with FOS so let’s see what they make of it but if anyone from the FSA is reading and wants more details, I’d be happy to supply on this and other cases.

    Sadly this lady trusted the bank as she’s been with them for 40 years.

  7. Exasperated me 21st July 2010 at 7:03 pm

    I spent more time unpicking the mess that the banks (and DSFs) had made than I did on my own new business, unfortunately unpaid social service doesn’t pay the bills.

    I bet you all know know how that feels, well maybe not all of you.

    What I find disgraceful is the fact that the regulator set up to ensure that consumers receive a fair deal stands back, or is does it look the other way?

    Regulation as we know it is bust.

  8. Duncan Carter

    Having successfully aided a client to take a complaint against Lloyds TSB to FOS a couple of years ago – she should get her money back regarding PPI. My clients had banked with them for 15years, then decided to buy a shop. Lloyds promptly banged on a PPI for £24K to a £100K loan. The client ended up in hospital with suspected heart attack when she found out, what they’d made her sign.

    It took 3 years but they were made to pay every single penny back to the clients…over £11K in all plus interest.

    It’s quite simply the worst case of financial advice I have ever seen, to make a start up business pay interest on the loan for PPI of £237 per month ontop of the loan used to buy the business, is completely immoral…

    As one of my colleagues says who used to be a manager who is a lovely guy & used to do his best for customers but left when all his job became was meeting weekly targets & bullying his staff……”the banks are absolute scum!”

  9. In response to Julian Stevens’ comments, the IFA Sector has had light tough regulation for nearly 2 decades, so don’t give me that !

  10. Not the banks mis selling again, who would have thought that……….adding up all the instances over the years surely they should have had their licence revoked by now (dont be silly, they feed the FSA)

  11. I’m a Dip PFS qualified adviser with 25 years experience in financial services who was made redundant last year.

    I have tried to get an employed position with the Banks as I do not have my own client bank. I have been unable to get a position with the Banks and even get to an interview position apart from with one Bank.

    Their criteria appears to be just the basic FPC qualification as long as you can show a track record in Bancassurance as a top performer.

  12. Peter Davies @ Create Wealth Management 22nd July 2010 at 8:40 am

    If you need financial advice avoid going to a high street bank at all costs. Time and time again we are hearing of some horrendous mis-selling cases and this week’s Panorama programme highlights the problems at Barclays. Elderly client’s who by their nature often tend to have accumulated good levels of savings appear to be easy targets for bank sales people. Yesterday, once again Vince Cable has commented about the poor selling practices and bonus culture at high street banks. It has been going on for years and still is. Bank managers, under pressure to hit their targets, report to regional directors whose pay package is very much dependent on the branches hitting their targets. The regional directors then report to UK sales directors. There is a fear culture which is ultimately centered on creating more income and higher profits to keep the likes of the CEO at the helm as ultimately the profit levels drive the share price. An increasing share price and dividend payments keeps shareholders happy. Quite simply, it is the drive for shareholder return from the man at the top to the salesman in the bank that is causing these problems; it is pressure being created and builds and builds. The whole system needs changing, lets hope Vince Cable is the man to begin such reform as its way overdue.

  13. IFA’s ought to use this as a marketing coup to take clients from the banks. You’d be better off doing that than posting your usual boring “banks are sh*t, IFAs are great” comments on here…

  14. Peter Davies – good points but then why do non-owner IFAs have targets? Isn’t it to keep the owners in the manner to which they have become accustomed? Are targets ever a good thing for the customers of any Financial Services provider?

  15. I have worked in banks over the years, in lending previously and the pressure on staff to sell repayment protection in loans is ridiculous! The questioning techniques they asked you to use “well if you lost your job you would have to sell your car to pay for your new car loan payments….how will you get to job interviews…..” totally unrealistic!
    I now work in financial advice as high level support and there are some good advisers out there, even for the companys that are being slated here. Unfortunately there are still sharks in the industry who are interested in nothing but making a quick buck but the worst culprits are the banks that are quite happy to sweep the unprofessional advice that is given under the carpet as long as these advisers are making money. the wealth advisers take a fraction of the charges that the guys at the branches take! The life companies don’t exactly help offering up to 8% sometimes on specific products but again, they get none of the criticism. For example, a bond of £50,000 can generate commission of £3,000!
    Like all industries, please do not tar us all with the same brush, some of us do like to sleep at night knowing we have done the best for our clients!

  16. We have had a complaint with the FOS since February 2009, regarding two “miss sold” Barclay products. We are “senior citizens” and with pensions not increasing, almost zero interest rate, recession things are getting harder.

    It is positive to see some like persons take the imitative.

    What can we do, would raising a Government web petition assist?

  17. Banks to a great deal of damage. In our experience they commit the following mistakes regularly:
    1. Fail to indentify the need for capital or income
    2. Fail to establish and explore attitude to risk
    3. Fail to take into account other assets and plans
    4. Product push.
    5. Fail to carry out holistic financial planning recognising the need for protection, savings and investments planning.
    6. Ignore needs for short, medium and long term money
    7. Fail to ask one vital question – do you have an independent financial adviser and have you met with him recently? They should back out if the answer is yes because they often end up disrupting years of work which we end up putting right – and the client pays…..
    I agree with the first post – where is the FSA in all this?

  18. Premier Shareholders Group 23rd July 2010 at 9:42 am

    Misrepresenting a financial product or fund`s “risk rating”, particularly to elderly people, is unforgivable.
    The Isle of Man regulator turns a blind eye to this practice. For prima facie evidence of this contact psa350@orange.es

  19. am I missing something here……
    wasn’t the problem the way the fund was classified?

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