Which? blasts bank advisers

Which? has warned of a sharp increase in elderly people complaining they have been missold investment products by bank advisers, echoing the concerns of the Financial Ombudsman Service.

The consumer group says it has received an increased number of calls from elderly people who have been sold investment bonds, believing them to be savings bonds, after receiving advice from tied and multi-tied advisers.

Which? says if it continues to receive such a large number of cases, it may consider complaining to the FOS itself on behalf of the customers.

It believes this could ultimately lead to an FSA investigation under the wider implications’ regime. Which? says it has received calls from clients of Alliance & Leicester, Bradford & Bingley, the Co-operative Bank, Legal & General and Barclays.

Last week, Aifa called for the FSA to launch an investigation into bank advice after the FOS reported a rise in complaints about investment advice from people aged 65 or older, which it attributed to bank advisers.

Which? principal researcher Teresa Fritz says: “These people thought that they had a savings bond where only their income could fluctuate, they had no idea that their capital was at risk.

“The bank advisers were not actually explaining to them that if the stockmarket goes down, the investment would reduce. The elderly investors are now getting their statements in and wondering how they could have lost so much. They did not think it could happen.

“I worry these elderly people will just grin and bear it but the more momentum that goes with this, the more people will complain. It needs to be kept a close eye on in terms of the FSA and FOS and, if poss- ible, it might have to be raised as a wider implications’ issue.”

Speaking to Money Marketing this week, Friends Provident chief executive Trevor Matthews highlights flaws in UK bank advice. He says that in Australia, bank-owned life companies passed on profits to customers by offering them a better deal but in the UK they have generally seen “the distribution of life products as another way of making good money and the customer has not been significantly better off”.

A spokesman from The Co-Op says: “We take any complaints of mis-selling extremely seriously and have robust procedures in place when such instances arise.”

A Santander spokesperson says: “All our products are sold within FSA guidelines and customers are made clear what they are buying at all times.”

A spokeswoman from L&G says: “”If any customers have concerns they can contact us and we’ll be happy to look into their complaints for them. An experienced person will deal with their complaint.”

Barclays refused to comment.


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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. Mis-sold Investement Products
    Having worked for 14 years for the previously alleged” largest IFA on the high street”, it comes as no surprise that more and more elderly people are complaining about advice given. Whilst the majority of advisers wont mis-sell a product there are the few who will sell anything to boost their commission figures. I know that having reported in house concerns about certain practices higher management were not interested as long as their “figures” looked good each week. Phoning your clients on annual basis just to see if they have any more money to invest is not acceptable and very rarely were client reviews carried out for the right reasons. Its about time that these companies are held accountable for the “sales” regimes they have/had in place.

  2. Which? blasts bank advisers
    This has been going on for years on end, right under the nose of the FSA, but what has the FSA done about it? Nothing. Just looked the other way and pressed ahead with its next hindsight review and its programme to exterminate the GP IFA. Perhaps the FSA would care to comment. Perhaps it’ll snow in the Sahara next June.

  3. Acting as Previous
    They are doing exactly what they did previously. That is they cherry picked accounts and moved monies into distribution and with profit bonds. They are now doing a similar exercise particularly with structured products. I had one client who had ten minutes in a building society with two kids running round her and she came out with a Keydata product under her arm with £23,000 invested. Little was explained and particularly the fact that the building society was not providing the product. On visiting her recently she was no even aware that Keydata was in administration. It is about time they stopped this kind of sales regime and started to give quality advice.

  4. Complaints bout Bank Advisers
    This really doesn’t surprise me. The Bank ‘Advisers’ have targets to meet to pay for their next jolly. They are nothing more than salespeople, peddling their wares of dubious quality to anyone and everyone. The focus is on quantity and hang the consequences – so what if a few people complain? I should know – I used to be one! Until it became apparant that having a conscience and wanting to do the right thing by people weren’t qualities my boss thought were valuable.

  5. J Alan Campbell 27th August 2009 at 1:02 pm

    Bank Advisers
    Glad to see that Which? proposes to take action on bank investment advisers, this has been going on for too long and the FSA seem to be ignoring the problem or simply does not want to upset the banks as brokers are easier targets.. Now how about also challenging them on protection products and mortgage advice. I regularly have to rescue clients who have been sold products which can only be to meet a target imposed on the bank seller.

  6. Bank ‘advice’.!!!
    Will the FSA coduct one of their ‘famous’ reviews on bank ‘advice’?. There is as much chance of that as seeing Lord Lucan roaring around Canary Wharf on Shergar.

  7. Bank Advice
    The FSA launching an investigation into bank advice? For years now the evidence of selling products against targets by bank salespeople, as against selling advice against client needs, has been overwhelming. If the FSA were going to take action or had the resolve to take action it would have happened by now. An analogy I have used before (apologies to all who are familiar with it) but there is not a lot of point in putting a range of state of the art locks on the stable door as the sound of hooves disappears into the distance. Better to sack the locksmith I would have thought

  8. Bank Advice
    All the other comments are spot on – this practice is still going on right now by one of the biggest banks that are now owned by the public!! “Sales people” cant meet targets and in this current climate there are very few who can and are willing to try and take on their employers for fear of losing their jobs or being “performance managed” – never mind best advice who cares what that is!

  9. Bank Advice
    Once again the “Banks” are targeted but the scattergun approach blackens everyone which is simply not true. Yes the major “Banks” put their people under enormous pressure to sell BUT IT HAS TO CONFORM TO STRINGENT COMPLIANCE OR THE ADVISER IS SACKED!! I am a Bank adviser and proud of my advice record – no complaints in 15 years. I have rescued customers of so called IFAs who only recommend from a narrow fields (I was also an IFA for a while)and so called “Partners” in what are no more than sales shops so its down to individuals and their ethics. I am also a qualified stockbroker so my knowledge of investments is as good as anyones. I have read Which and found most of it fairly rubbish so why should their recommendations be so special or are they perfect. The only people who complain are those who lose and most of them lost because they did not take the full advice of their adviser. Stop blaming the Banks or name individuals and face them in court when they sue you for defamation. Go on, do it if you have the strength of your convictions. I personally would love to sue anyone who had a go at me.

  10. Good to get both sides from Mike Lidgett
    or are there any sides?
    Having been both sides of the fence like Mike (BankIFA, then tied Bank, then Directly Regulated IFA, I agree with him thee are good and bad advisers both sides of the fence and we should support the good practices in the banks and criticise the bad, just as we get our criticism as IFAs (sometimes rightly so). I don’t know if targets at banks are still a problem, but I suspect so and the main bugbear for me with banks tied arms (or IFA arms) is lack of ongoing service to people they have sold bonds too because the commission has all been taken up front and the “adviser” gets no credit on their target for SERVICE. Targets are also to short term, i.e. 1 year targets when a lot of the stuff an advisr does (particularly when commission is involved) may not result on remunerable business for 2 or 3 years (I have had some take 5 or 6 before, but it’s been worth it in the end) This is one good thing that the RDR COULD sort out, but has gradually became a tool to manage IFA distribution and overlook the Banks failures to give ongoing service on products once sold.
    So my point is the problem at bank advice level is systemic and NOT anything to do with the actual adviser per see.

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