Bank advice on personal finance termed as ‘misleading’ and ‘inaccurate’

Banks Were Found Deficient on Advisory Services

Banks Were Found Deficient on Advisory Services

Financial advisers and investment experts condemned the advice given to consumers shown on a BBC expose in the documentary series Panorama, terming them as ‘inaccurate’, ‘pressurized’ and ‘misleading’.

Two mystery shoppers were shown seeking advice on the program from different banks on how to invest a pension pot of £90,000. Both the shoppers clearly stated the bank advisers they did not want to risk their £90,000 capital.

Although majority of the banks did do a risk-profiling at the beginning, Adrian Lowcock, a senior investment adviser with Bestinvest was shocked to find HSBC skipping the procedure until the end of the meeting, that too at the customer’s insistence.

Mr. Lowcock chose to single out an adviser from Lloyds, terming him “too fast and confusing, inaccurate and mis-leading on the rate” and said all the advisers in general were ‘uncomfortable’ discussing the fees.

“Being upfront and honest about charges was difficult for the advisers. This particular adviser said the charges came from the fund and not their money”, said Mr. Lowcock.

“This is misleading as the money was put into the fund therefore the charges are still coming out of your money. This was not explained”, he added.

An adviser from the Royal Bank of Scotland (RBS) indulged in pressure tactics telling the potential customer that a sale was on and he didn’t know when it will end, essentially forcing the investor to take an immediate decision.

The adviser also said: “At no stage can you lose all your money” during the course of the advisory session.

“Another referred to an investment sale where the investor could get a discount if they acted now which was blatantly a pressured sale. A lot of things could have been done better”, observed Mr. Lowcock.

The banks didn’t start “from a good place”, but did “better than (he) expected” them to do, admitted Mr. Lowcock.

“I didn’t get the feeling that they were there to help the client, there were there as employees of the banks. They have got a job to do and they are under pressure to sell these products in a limited time to hit their targets” said Mr. Lowcock.

“Banks do have a role to play. Each investor had £90,000 and the cost of going to a fully bespoke IFA for advice wouldn’t be financially viable”, he added.

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