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The many faces of Barclays

Barclays is continuing to publicly champion raising standards of advice and increasing consumer confidence whilst rejecting complaints from customers unhappy with the service they were given by its multi-tied advisers.

Earlier this year, Money Marketing unearthed concerns from former clients of Barclays who say they were advised to cash in all their investments and put them into a single fund – the Aviva global balanced income fund.

Not only did the clients say they were advised to put all their eggs in one basket- the provider then admitted to Money Marketing that it misclassified the fund, which should have been adventurous, not balanced.

At the PFS RDR conference on July 10, Money Marketing pressed Barclays Financial Planning products director David Stuart on what he was going to do to ensure this type of behaviour is not repeated going forward.

He insisted Barclays is dedicated to the highest levels of customer service. However Park House Financial Services partner Richard Davis says the bank continues to reject complaints about advice surrounding this particular range of funds.

This week Money Marketing wrote about an elderly widow concerned about a fall in her fixed-interest bond who wanted capital security but was advised to transfer into an Aviva fund which invested up to 40 per cent in equities.

Davis, who is now servicing the client, says the decision has led to her investment falling double the amount it would otherwise have fallen.

The client complained to Barclays but had the complaint rejected and she will join the growing number of complaints from Barclays customers ending up with the Financial Ombudsman Service.

Does more need to be done to stop large organisations hiding behind the drawn-out complaints processes and small print?

Does this episode prove the FSA is right to ensure multi-tied and tied advisers are qualified to the same standards as IFAs under the RDR? The banks are certainly lobbying behind the scenes to try and water down these proposals.

The FOS has announced it will publish complaints data for firms with 30 new and 30 closed cases in a six month period. Will this do enough to make the complaints process more transparent?

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. We all know the truth
    All of the major financial instiutions have got away with poor levels of advice for too long now. Low quality products and multiple sales just increase profits.

    In my experiences coming against the large Bank Assurers Investment Advice it has always been about them selling a product and not really providing good advice. Eg, lots of single fund sales and no spread of investments.

    High Levels of income being taken from unsuitable funds etc.

    The Regulator has turned a Blind Eye to it in my opinion. In simple terms not enough IFA’s in the market place as caused this, and greedy Bank Assurers doing what they like will continue to give all of the Financial Services Industry a bad It is about time the likes of Barclays sorted out their processes and provided decent advice. There is actually a need for it.

    Richard Smith
    http://www.thefinancezone.co.uk

  2. Barclays
    The Bank advisers are no more advisers than my Granny. as an Independant Adviser i have on many occassions advised my customers to invest in Cash ISA,s. Only to find out later than once the Bank Advisers (Policy Floggers) got thier claws into them they walked out with Equity ISA,s. This to me is outrages especially as most of the customers this has happened to would be considered very cautious investors and would not be seen as sophisticated investors. It is all about putting numbers on the Sales Managers league tables. They have no concern or care for the customer at all, Just the sales targets.

  3. RISK RATING OF FUND
    The Aviva risk ratng of this fund in the July performance tables today is said to be 3 (Medium).
    You may wish to comment further on this yourselves.

  4. Is this what RDR is designed to propagate?
    I worked for BISCO, competing with Barclays Life for new business, or being called in when an IFA was also involved. The banks are in a privileged position, the staff know how much has landed in an account and their targets force them to bring on the sales pitch. The staff don’t enjoy forcing people into investements which are unsuitable, not that they would know that was so! I keep thinking about the madness of RDR, creating an anti-competitive environment where IFAs are paid one way, like it or lump it, and banks are paid the way they want, this will continue to foster a culture of pyramid selling. Yes it is like that, the man right at the top gets the biggest share of commission but it is called a ‘bonus’, just like Equitable Life used to operate. When will the regulators and the politicians listen to common sense? When Hell freezes over? Small IFAs may be a ‘cottage industry’ according the that Aussie who shall remain nameless but the fact is that they are trusted by their clients, how else do you stay in business for decades when you don’t have access to someone’s bank account details? Is that TCF in action rather than words?

  5. Misselling by Barclay’s advisers
    Two possible remedies for this type of problem: (1) Numbers and subjects of complaints to be published prominently and made available to clients when specific products are referred to by an adviser; (2) The professional body of which these advisers are members could demand an explanation with a view to compulsory training or disciplinary action if the firm’s interest is being put before client interest.

  6. John Blackmore 29th July 2009 at 7:03 pm

    Product Regulation
    >Does this episode prove the FSA is right to ensure >multi-tied and tied advisers are qualified to the same >standards as IFAs under the RDR?

    Not at all. The FSA could not be more wrong in requiring Q level 4 for all. Proper Independent Advice requires level 6 ( degree level minimum) as a basic starting point. Tied and Multi – Tied Sales on the other hand requires Regulated Products. Products can and should be designed so as to provide benefits to the vast majority who do not require complex, expensive Independent advice.

    A further danger in requiring Q level 4 for all is that the public may then be misled into thinking that holders of Q level 4 actually have a qualification worth mentioning. Far better to allow Sales people to remain unqualified but to restrict the type of products that can be sold.

    95% of the population need simple, inexpensive, quality controlled products with the other 5% requiring complex, expensive, Independent advice.

    Imposing RDR on all will probably help the 5% minority but do nothing to help the 95% majority. There is even a good chance that it will make things worse.

  7. Anonymouse says…
    “The Aviva risk ratng of this fund in the July performance tables today is said to be 3 (Medium).
    You may wish to comment further on this yourselves.” Who pulled your string then Mr Anonymouse? A Viva? Or a Shark Ley? I have seen so many people shoved into a cubby hole which is so inappropriate that the end result is unequivocal distress. That goes for all distribution models but the overwhelming majority of bad advice is to be found at the feet of the banks and providers, with the sanction of the regulators of course. I feel a need for a public inquiry coming on, anyone else want to bang upon the same drum?

  8. THE FSA IS RUN BY THE BANKS FOR THE BANKS BY FORMER BANKERS
    FINANCIAL OMBUDSMAN SERVICE COMPLAINTS 2008/09

    banks: 59%
    independent financial advisers (IFAs): 3%*

    IFA’s ~ 80% of the distribution, 3% of all complaints referred to the FOS. Uphold rates just 33%.
    Banks ~ 26% of distribution, 59% of all complaints referred to the FOS. Uphold rates 69%.

    * Of the 3% IFA complaints 2.1% were dismissed bringing the total of upheld complaints for IFA’s down to just 0.9%. This is all the more remarkable when you consider that in 2005 the FSA representation to the Treasury Select Committee showed that IFA’s generated 80% of financial service distribution!

    RDR is a gift from the regulators to the banks of IFA distribution inspite of the above facts. Could this be because the FSA is run by former bankers?

  9. I’ll bang my Drum
    To give the banks the benefit of the doubt, let them put their money where their mouth is and as my firm does record ALL client meetings as MP3 sound files. There is no need for ANY benefit of the doubt there as what was said and by whom will be clear for all to see as will the inten of the adviser, how well disclosure of status was made and whether customer agreed remuneration took place (Oh no I forgot it was decided this was tooclear so the “Adviser charging title was decided on which will confuse the issue over advice and non advice (sales)

  10. Barclays Life/ BISCO
    Following Evan Owen’s comments on BISCO I worked for Barclays Life for over a decade. Two comments on training and culture.
    1. As a Group Controller I was also very much a Field Trainer, in my case looking after over forty sales staff. When new staff came into the field off ‘induction training’ they all explained to me that during training they had ‘done the maths’ and found that transferring potential clients from Final Salary schemes into PPP’s (personal pension plans) would mean a BETTER pension for the client!!! Trying to reverse this initial training was an uphill task, HO training must be right mustn’t it?
    2. Barclays attitude to its field sales staff rested very much on the fear factor which was delivered directly to the Field Sales Staff at Area and Regional meetings, by senior HO management, and was explicitly stated.
    ‘Do as we tell you otherwise we will make sure that you never work in financial services ever again’, is just one comment I recall from a Regional meeting.

    With training and attitudes such as these is it any wonder they have the high level of complaints they do.

    It is purely a personal perception but having worked (going back a bit!) for both Midland and a subsidiary of NW my feeling was that

  11. Completing ‘Anonymous’ 30/07/09 @12:11PM
    ….my feeling was that Barclays was by a good way the most aggressive and indeed arrogant of the three.

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