As we read a lot of articles every week on a wide variety of subjects, a very
common one that keeps on coming up is the appalling reputation of the banks.
Time after time we read of the banks' sales people selling products that are
totally unsuitable to unsuspecting customers.
Which? Magazine has recently carried out research on this very subject. In an
undercover probe, researchers found that just 4 out of 37 branches of banks and
building societies gave good advice about investing a lump sum.
Think about this. Imagine a similar probe were to be carried out on doctors
and dentists, and the findings were that nearly 90% of them were totally failing
their patients. There would be a massive outcry!
Yet, week in week out, this has been going on with the banks for years and
years. It is worth remembering of course that these sales people are under
enormous pressure to sell sell sell.
It is a culture thing. When a bank decides to launch a product, one could be
led to believe that the only thing they are concerned about is how much money
they can make from it, and how much of this product can they sell to you.
Taking one example here of appalling advice, an independent adviser in
Liverpool recently went into battle for a client against a bank. What had they
done? Well, how about this...
The client was 66 years old, had £300,000 to invest (which he had recently
inherited), and stressed he was a low risk investor.
So what did the banks 'adviser' recommend? The whole amount was put into a
property fund. Yes, the whole amount! Of course, what happened was that the fund
went down to something like £190,000 over the following 2 years!
This resulted in a very worried and confused pensioner.
The good news is that the independent adviser took this to the Financial
Ombudsman Service (FOS), which ordered the bank to consider its position over
the complaint. As a result, the bank compensated the investor.
What this shows is that it is vital to deal with an adviser who is not only
independent, but IMPARTIAL.
The only way that this can happen is that you choose an adviser who works for
you and not the product provider. This means agreeing to pay fees, rather than
commission.
So by paying for advice, as we constantly find with our medics and dentists,
it could well be that paying off debt, spending or gifting more is the correct
solution!
For the banks of course, fees scare them. They are so used to selling
products, it is a huge ask for them to see the error of their ways. After all,
if all you have is a hammer, everything looks like a nail.
With a Fee Based Planner who has a complete tool set, you can be rest assured
that they will work with and for you to achieve your goals in life.
The Financial Tips Bottom Line
Make sure that if you decide to use an adviser, they are not only
independent, but impartial. This means they charge you a fee to advise you on
creating a strategy for life.
Products come a distant second!
ACTION POINT
If you have used a bank for advice now or in the past, it really is worth
reviewing any products that you may have been sold, as well as your overall
position.
