So what is it going to take to make the FSA do something to stop banks flogging unsuitable products, particularly to elderly consumers?
In Money Marketing this week, the Association of Independent Financial Advisers is calling for an FSA investigation into bank advice after FOS identified an increase in unsuitable investment advice being given to the elderly.
A FOS spokeswoman says: “We are seeing an increase in complaints from older consumers where they have been advised by a bank, rather than an independent financial adviser.
“Many of these consumers had only gone into the bank branch to make a withdrawal from a savings or deposit account but ended up being advised to take out an investment.
“It is particularly concerning that even when a consumer had explicitly referred to the fact that their main priority was to protect their capital rather than generate a return, they were still advised to invest in funds that put their capital at risk.”
But the FSA will not commit to a specific review of banks’ advice practices, despite the FOS’s fears. It says it will continue to handle the FOS’s concerns under its regular supervisory process.
Association of Independent Financial Advisers director general Chris Cummings says that is no longer sufficient. He says the FSA has to take a close look at bank advice and protect vulnerable consumers.
In April, Money Marketing revealed adviser concerns about advice given by Barclays’ advisers to elderly investors to invest large sums in Aviva’s global balanced income fund. It is understood there are now over 200 complaints that have been referred to the FOS over Barclays’ advice.
Do you support Aifa’s calls for a review of banks’ investment advice procedures?
What can the FSA, trade bodies, IFAs or other groups do to ensure consumers, and particularly the elderly, are aware of the independent advice option?
Post your comments below.