We felt that this story was worth reproducing in full, it is from today’s Independent, via their award winning Personal Finance editor Charlie Weston. This clearly lays it out in our opinion: getting advice in your local bank branch is perhaps the worst option available, and that puts the value of an independent broker in the light we always aim for, one of being on the customer side, the recent Sunday Times article (three posts before this) demonstrated that in a cost comparison analysis that even the Regulator themselves couldn’t get the prices brokers are able to obtain for their customers!
Tuesday December 08 2009
IF you want bad advice, then pop into your local bank branch.
That is the clear message from the latest set of case studies released by Financial Services Ombudsman Joe Meade.
Mr Meade has performed an enormous service for consumers by exposing yet again the shady practices of banks, in particular, when people seek advice.
His report is shot through with examples of consumers, particularly older ones, going to banks to put money on deposit and being persuaded instead to take out unsuitable products.
Eighty-year-olds find themselves locked into six-year bonds after seeking advice from sharp-suited whizkids wielding a calculator and displaying all the moral fibre of a pickpocket.
Time and again the emphasis is on pushing a product that will maximise commissions for the bank officials, but be pretty useless for the customer.
In one of the most shocking case studies published by Mr Meade last week a financial review, or a fact find as it is known, was so full of errors it is clear it was not completed by the customer of the bank.
Mr Meade said the document, which is legally required to be filled out by financial advisers, was not signed. It seems the adviser was trying to justify bad advice after the event by falsifying a document.
If we had a decent Financial Regulator in this country the adviser responsible for this would never work in finance again. But don’t hold your breath on that one.
Mr Meade, who retires at the end of this month, has spent almost five years exposing shady practices by finance firms. He has called for a culture change in our financial companies. But what his reports show, more than anything else, is that you should never step anywhere near a bank if you want impartial financial advice.
The asset test of whether or not you are getting good advice is if you go into a bank with €10,000 to invest. Suppose it emerges that you also owe €10,000 on the credit card? In most banks you will probably be talked into investing the money in a new product that will produce fat fees and commissions for the bank and the official.
But if you got truly independent advice you would be told to pay off the €10,000 on your credit card. The only way to be sure you will get impartial advice is to seek out a financial adviser who is prepared to operate on a fee-only basis — that is without commissions.
– Charlie Weston
Good post. I agree. Also, most “financial advisors” are really just salespeople, plus very few of them actually follow their own advice. When looking for an advisor, I agree with the advise from “rich dad poor dad” which says that you should find an advisor who is advising on something that they do themselves.