The FSA is set to announce, release a dossier that reveals that major high street banks Mis Sold Investments that were risky to thousands of customers.
The report will detail how Bank salesmen gave poor and misleading advice which put customers savings, “nest eggs” at risk. One major Bank is already facing fines in the millions and investment compensation payouts after the City watchdog serious investigations unit
A day of shame for British banks: Watchdog accuses them of gambling your nest eggs
High Street banks will today be accused of gambling the hard earned savings of the vulnerable by selling thousands of customers risky investment plans.
In another day of shame for the industry, the Financial Services Authority will publish a devastating dossier exposing how salesmen gave poor and misleading advice which put customer nest eggs at risk. It is the latest damaging revelation as they desperately try to restore their reputations in the wake of the interest rate rigging scandal.
At least one major bank faces fines totalling millions of pounds and compensation payouts after being referred to the City watchdog’s serious investigations unit.
The findings are the result of a secret probe in which investigators masqueraded as ordinary members of the public to uncover the way sales staff at banks and building societies were giving advice.
In a large number of cases, salesmen recommended investments that were far more risky than the customer should have been offered.
This can include directing people who cannot afford to lose any money into shares or other products with similar dangers.
The FSA is expected to say there was a serious risk of mis-selling.
In December, the City watchdog privately issued a set of demands and called for drastic improvements from the banks.
Although it is not expected to name the worst offenders, a number of big names have already made changes to their sales staff.
On December 7, Spanish-owned Santander suspended its 800 investment advisers. Many have been sent on an ‘intensive’ retraining programme.
These salesmen are scheduled to have crunch talks with the bank in Birmingham today. Santander refused to confirm whether it had been warned by the FSA.
Justin Modray, founder of advice website Candid Money, says: ‘Banks have long been among the worst culprits of giving bad financial advice.
‘All too often advisers are under intense pressure from bank bosses to sell profitable products, with scant regard for whether they are suitable for customer.
‘Every time these incidents come to light the banks make noise about improving standards and procedures, but it’s clear very little ever changes.’
The probe is the latest effort by the City watchdog to stamp out shoddy practice.
Last September it blamed a culture of commission at banks for encouraging ‘pile it high and sell it quick’ tactics that verged on the criminal.
Frontline sales staff were routinely awarded huge bonuses for selling more products – regardless of whether they were right for the customer.
Twenty of 22 firms investigated by the FSA between September 2010 and September 2011 were found to have ‘features in their incentive schemes that increased the risk of mis-selling’. In December 2011, HSBC was fined £10.5million after thousands of frail elderly people were lured into gambling their life savings.
A Santander spokesman said: ‘We continue to review our financial advice offering. The meeting today in Birmingham is part of this commitment.’
The FSA made no comment last night.
Read more: http://www.thisismoney.co.uk/news/article
+Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim
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