Bank Advice Issues
We are all aware of the excessive risk taken by the banks with our deposits, our money being used to bail them out and then that being used to pay huge bonuses for further risk taking.
Combine this with the Libor rigging scandal and PPI mis-selling and you wonder what the world is coming to.
Another headline caught my eye recently in one of our industry magazines, which was ‘Banks’ bill for pension and investment mis-selling hits £1.2 billion’.
I thought this was eye watering enough until I read on.
The total figure to date for mis-selling of financial products to clients over the last 15 years is a staggering £38.5 billion, a large portion of which you would imagine, we as the taxpayer has paid.
According to think tank New City Agenda and Cas Business School this has been put down to an ‘aggressive sales culture’ which rewards staff for promoting and selling financial products irrespective of risk and customer needs.
I understand that there is a certain loyalty that people have to their banks, but it is highly unlikely that even if the bank adviser can give the client exactly what they need, they only have a limited range of options available.
We would like to see a wholesale move away from the banks for financial and investment advice.
Banks should go back to what they do best which is facilitating the payments system, lending to individuals and businesses and taking deposits.
As most business owners will be aware lending and goodwill from banks is in short supply.
An Independent Financial Adviser or Wealth Manager can offer a service and level of advice that is simply not available in the banking space.
Of course over the years there will have been good individuals working in the banks with the client at heart but the environment would not allow them to give the best advice.
All of the above is the reason most of the banks have withdrawn from the advice market, with a couple of notable exceptions.
Those who remain offer a Restricted Advice model.
We are aware of banks has writing to clients with less than £500,000 invested to tell them they are no longer wanted and should find a new adviser.
In some ways this is better than leaving thousands of customers sitting in substandard or unsuitable investments with no service at all, without any notification.
Any small business owner will tell you that customer is king and reputation is everything. That is no different in our industry.
We would be delighted to speak to anyone who has been similarly let down by their bank or any other financial institutions.
We will always work in our client’s best interests.