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Reyker chairman: Industry must stop ripping off consumers

The financial services industry will only succeed in improving consumer trust and increasing savings take-up when firms stop “ripping customers off”, says Reyker chairman Adrian Barnwell.

Speaking at the annual Tisa conference in London yesterday, Barnwell said firms need to be honest and listen to their customers.

He told delegates: “As a custodian firm we deal with tens of thousand of customers who have invested in products they don’t understand.

“The challenge for the industry is to recover trust with consumers. We will only do that if we are truthful, listen to our customers and deliver what they want.

“Fundamentally it is about keeping it simple and not ripping customers off.”

Reyker came under fire when it took over as custodian following the collapse of structured products firm Merchant Capital in 2012, and initially charged clients between £15 and £25 per investment to receive delayed income payments.

After becoming plan manager and custodian for Merchant Capital investors last year, it emerged around 12,000 clients would face hundreds of thousands of pounds in additional charges.

Responding to a question from Money Marketing on whether the charges Reyker imposed on Merchant Capital customers were fair, Barnwell said Reyker “saved” customers by taking over as custodian.

He said: “What we did as a custodian was save customers from companies that collapsed. This has been looked at by the regulator and the Financial Ombudsman Service numerous times and they have concluded that what we did was fair.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. If charging victims of previously collapsed companies considerably more than they charge new customers is “saving” them (rather than rank profiteering) I’m a hat!

  2. Perhaps Mr Barnwell might care to set out 10 examples of what, in his view, constitutes ripping off customers. I’m sure such activities still go on in certain less reputable corners of the industry, though certainly not in my back yard.

    Also, there is often a world of difference between clients’ understanding of a product at the time they commit money to it and as little as 12 months down the line. A client who’s been with me for more than 10 years phoned me this week wanting to discuss his concerns over the fact that the value of his income generating ISA portfolio has slipped 2.3% in value since April. It was a quick and simple matter to allay those concerns to his complete satisfaction, though it does highlight the fact that he’d completely forgotten the risk warnings set out in our original letter of recommendation from a decade earlier, not to mention the fact that his portfolio is worth comfortably more than the sum/s originally invested.

  3. I was getting very frustrated yesterday when Financial Services was again in the spotlight over FX rate rigging. What has LIBOR and FX got to do with what most people think about Financial Services.

    There seems to me a clear divide between Banks, Financial Institutions and advisers, planners. My work has nothing to do with LIBOR, FX or frankly PPI. If others will not distinguish I for one am moving out of Financial Services.

    I am now in Financial Planning. Anyone care to join me?

  4. The audacity of this man to stand up and lecture the industry on morals is breathtaking.

  5. @Julian Stevens – I agree completely. I have had clients come back 6 to 12 months after investing in something as straight forward as a stocks & shares ISA and they have completely forgotten some of the basic points that were definitely covered during the recommendation.

    I too am sick of being lumped into the same bracket as dodgy traders rigging LIBOR and FX rates. They probably know as much about what i do as i do about their jobs and i know which one of us is ripping people off.

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