The coalition manifesto says, “reform of the banking system is essential” and promises a levy on profits.
The last government made much of the competition it hopes will emerge from the hiving off of Lloyds and Royal Bank of Scotland branches. The financial meltdown has already promoted increased government scrutiny, with the Financial Services Authority taking over full supervision of retail banking only last November. But whatever the next political era brings, can we expect any changes to the way banks behave?
Financial adviser Steven Forbes recently helped a client recover from a traumatic banking experience. “This lady, let’s call her Jane, was told by her branch that she should see one of their advisers for a ‘review’,” says Forbes, managing director of Alan Steel Asset Management.
“At this meeting she was told that as she was not married and had no children, her sister, who is the executor in her will would have to pay a very large inheritance tax (IHT) bill, and as most of her estate was in property Jane need to take out an insurance policy to funds this.” She had, however, made it clear that she intended to leave most of her estate to local charities so, in fact, her sister would not have been liable to any IHT at all.
“Jane was put under a great deal of pressure to take out the policy at a cost of £900 per month. The adviser was using heavy sales techniques such as indicating the premium quoted was going to rise if she did not sign up now, and making her feel guilty that her sister would be left to pay such a tax charge.” Forbes says they bank would have received some £12,000 in commission for selling the policy.
“When I confirmed to her that she had absolutely no need to take out a policy such as this she was relieved and elated.”
He adds “For too long banks have been pretending to have their clients’ interest at heart when offering these ‘reviews’, when in reality they have been a means to try and get high commissions for selling inappropriate products.” ......
Quote courtesy of The Sunday Herald
Sunday 30 May 2010
