Our latest investigation into the investment advice given by high street banks and building societies has uncovered widespread failings. Have you been given risky financial advice in your local bank branch?
We’re living in tough times. The crisis in the Eurozone has seen the stock markets jump up and down viciously. And inflation, while having fallen yesterday, is still at such a height that savers aren’t getting a real return on their money.
Many find themselves turning to investments to try and beat inflation, especially older people on fixed incomes where the scourge of inflation has such a devastating effect. And getting the right advice if they do decide to take this step is vital.
However, our latest undercover investigation has found that going to a high street bank or building society for this is likely to leave you with less than a decent outcome.
Risky investment advice
We investigated the quality of advice in 37 bank and building society branches and found that only five advisers gave good advice.
We found advisers recommending inappropriate products to our elderly and inexperienced undercover researchers, poor assessment of how much risk they should take and misleading information about how advice was paid for.
We saw evidence of advisers selling products that would net their employers huge levels of commission, which were completely disproportionate to the service being provided. Pressuring advisers to meet commission targets is bound to lead to misselling.
It’s disappointing to see this poor practice continuing on the high street. We carried out a similar investigation two years ago, and only four advisers managed to pass our tests. Despite two major banks being fined in 2011 for misselling and poor complaints handling, banks still haven’t upped their game.
Our challenge to the banks
If you’re going to commit a significant amount of your wealth to investments, banks need to give you advice that will deliver a good outcome for you, not them. There needs to be a shift in culture where the customer’s needs come first, and not the bottom line of the bank.
The challenge is out there for banks to improve their practices. If we investigate them again in a couple of years time, we want to see their pass rate rocket.
Banks get a lot of stick, but we’re really waiting for the day when we can publish a story about the great advice customers can get in their bank branch. Let’s hope it’s not too far off.
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