Banks caught trying to scam the elderly (Again?)

This report was in yesterday's Indo.

Is this not the second time that this issue has been raised in the past two years?

If the Regulator does not name the banks, how are we supposed to know if they are re-offending again and again?

tenchi-fan

I work in for a bank that sells investment products. A few of the sales staff are incompetent, simple as. They don't know how the products work, they just know someone is coming in with money and think "well, she's elderly, I'll sell her something safe with a capital guarantee that she can draw an income from."

In a lot of cases the branch manager is too busy with loans to realise the staff member is mis-selling products.

dotsman

This is always happening. The ombudsman has been screaming about it for years. I believe, they should not only name the banks but the financial advisor, and their direct management as well.

This should not be turned into a bank-bashing discussion. For the most part, this is not standard practice, and should be recognised as such. But it is still happening a minority of the time. Whether it is individual advisers choosing to do this to meet targets etc, their manager's putting them under pressure etc, or whether the bank policy is "Don't miss-sell products (wink, wink)" needs to be fully investigated and the culprits punished severely (large fines for both the bank and personal individuals themselves as well).

I honestly can't think of a good reason why banks should be allowed to sell these types of products, in the first place. It's not like the clients are getting excellent value for money or unbiased advice.

At a minimum, there should be no 'sharing' of information between the bank manager and the advisor.

Their core activities are deposit and lending money. If they can't even get that balance right, what hope is there for the unsuspecting consumer?

tenchi-fan

Hi GerardS.

You have a really good point there, but then some people just prefer getting all their financial affairs dealt with by their bank. It might be better than going to a small broker who is commission focussed and who might try to wash his hands of any complaints - they might not have the same recourse or customer service as with a large financial services company.

It might not be in the client's best interest to hoard all their money into a deposit account but the branch manager isn't likely to advise the client of this unless the investment products are also available in the branch.

Hi tenchifan,

It really is down to education. Folk just don't understand the differences between the types of services offered by the diffetent types of 'financial advisors'.

If you go to a bank you don't have the option of paying for advice through a fee based model, it's commission and that's it. So, you are never going to get anything that resembles independent advice at a bank.

Size of institution does not matter when it comes to complaints. The same procedures have to be followed and ASAIK the penalties are the same.