Prime Time this Thursday (tomorrow) at 9.30 pm will be following up on the Financial Services Ombudsman's suggestions that there may be systematic misselling of investment products to elderly people. I believe Prime Time filmed some undercover "mystery shopping" and then interviewed well-known consumer advocates to review the advice received.
Prime Time Investigates Advice to Elderly, this Thursday 9:30pm
- Thread starter MugsGame
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Let's keep a sense of perspective.
What we saw on Prime Time tonight was very disturbing and the excuses given were flimsy at best. But to extrapolate from that and conclude that the entire finance business in Ireland is corrupt is taking things a bit far.
I hope that the programme will cause a lot of disquiet and might even lead some companies to change how they do business. But let's have some reasoned discussion about what we saw.
Regards
Homer
DrMoriarty
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It can be viewed (with Real Player) [broken link removed] — bottom right, entitled 'Mature investments'.
I didn't see it all but from what I saw I thought that they should have either identified none of the institutions that they mystery shopped or identified all of them.
The programme should be a balanced assessment rather than hunting for a story.
The casual nature of the advice given to the elderly and the apparent lack of appreciation for the impact that these investment decisions will have on the customers was alarming. I think that financial advisors should be mandated to document all investment advice. This might make some advisors consider their statements more closely.
The programme should be a balanced assessment rather than hunting for a story.
The casual nature of the advice given to the elderly and the apparent lack of appreciation for the impact that these investment decisions will have on the customers was alarming. I think that financial advisors should be mandated to document all investment advice. This might make some advisors consider their statements more closely.
Dave Vanian
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Mary O'Dea's reply about the Financial Regulator's investigation was really weak. Along the lines of "We wrote to the institutions and asked them if they mis-sell. They wrote back and told us they don't. But it was the Chief Executives of the institutions that wrote back, don't you know. So that's alright then." 
Mary O'Dea's reply about the Financial Regulator's investigation was really weak. Along the lines of "We wrote to the institutions and asked them if they mis-sell. They wrote back and told us they don't. But it was the Chief Executives of the institutions that wrote back, don't you know. So that's alright then."
Exactly. The reply came from "Chief Executive" so everything was fine. Someone should explain to her the concept of inspections. The point of the regulator is that banks don't regulate themselves but that is exactly what is happening if all a CEO has to do is write a letter saying everything is fine and the regulator happily accepts this and goes about its business doing up lovely glossy brochures and expensive ads explaining the very difficult concept of tracker mortgages.
ubiquitous
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They already are, and this (imho, and afaik according to some views expressed on the programme) is part of the problem. You can spend all day documenting advice in nice, fancy reports but if your verbal communications with the client differ from the text of the report, the report is useless. Clients rarely read such reports anyway.
Mary O'Dea's reply about the Financial Regulator's investigation was really weak. Along the lines of "We wrote to the institutions and asked them if they mis-sell. They wrote back and told us they don't. But it was the Chief Executives of the institutions that wrote back, don't you know. So that's alright then."
What passes for financial regulation in Ireland is a thundering disgrace.
Either the Financial Regulator does its job properley or it should be reformed with real teeth.
It needs to show, name and shame any institution involved in mis-selling whilst hitting them with heavy fines until they reform their ways.
I won't hold my breath
Duke of Marmalade
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Wow!! Mind-blowing, come back Endowment Mortgages all is forgiven.
Boss, you done well but I think your summary was a bit unfair. Those three advisors who recommended deposits are heroes, I agree with Eddie on that.
I don't want to get into the specific examples but the overwhelming message is that you can forget all your Consumer Protection Codes and Regulations. What is said at the consultations is a completely different world.
Duke of Marmalade
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It would be necessary to make it illegal for FIFAs to receive any commission or other inducements from providers. Only when fees from clients are their only remuneration can all incentive to misrepresent certain products be eradicated.
ubiquitous
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No, I don't think it would make a blind bit of difference, except perhaps to suit authorised advisors by designating them as fully independent even in the occasional cases when they are nothing of the sort.
The problem highlighted in last night's programme had nothing to do with labelling of advisors, and everything to do with the nature of the products being sold to the elderly lady. These were utterly unsuitable for her and would remain so regardless of who was selling them to her.
What I want to know is why the companies who devise and market such products are not forced to include, in their product design systems, basic controls against mis-selling. For example applications for long-term investment bonds made by a person over a specified age (perhaps 65/70 years?) should be routinely rejected in the same way as would happen to an application made in the name of a small child.
Duke of Marmalade
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The issue is not whether SecureSafe or a Cale With Profit Bond are unsuitable for the mystery shopper, they are not the worst. What was shocking was the misrepresentation.
On SecureSafe it was indicated quite unambiguously that there would be a 5% income and money back. It was also suggested that 9% was the expected return. I agree with the Boss that the brochures themselves on this product are a model of fair and readable representation. A whole new human frailty is being exposed here - the way inventivised persons will completely depart from these standards.
On the WP Bond we had the old misrepresentation of the true nature of the first year bonus.
On SecureSafe it was indicated quite unambiguously that there would be a 5% income and money back. It was also suggested that 9% was the expected return. I agree with the Boss that the brochures themselves on this product are a model of fair and readable representation. A whole new human frailty is being exposed here - the way inventivised persons will completely depart from these standards.
On the WP Bond we had the old misrepresentation of the true nature of the first year bonus.
"A whole new human frailty is being exposed here - the way incentivised persons will completely depart from these standards."
I agree with the second bit.
I read Vanity Fair again recently and what interested me most was how some things never change. I don't think what we saw was a new human frailty - I think it was a latent human frailty that I would have hoped responsible people would be able to see beyond.
mf
I agree with the second bit.
I read Vanity Fair again recently and what interested me most was how some things never change. I don't think what we saw was a new human frailty - I think it was a latent human frailty that I would have hoped responsible people would be able to see beyond.
mf
John Rambo
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There's a lot more to this. A friend of mine was sold a bells and whistles life insurance policy and told it was the bare minimum required. When his accountant reviewed his finances he realised what had happened and told him to demand his money back as he was missold an inappropriate product. Turns out the bank have a fake file with details of meetings that never happened in places my mate has never been. He is threatening to go to the papers. I remember my own experience with the same bank and their pressure selling, preying on the fears of women etc. This is the tip of the iceberg.
Can I ask are financial 'advisors' in this country part of any professional body with their own ethical and professional standards apart from what the regulator says is right or wrong. For example, I am a CFA charterholder and I would be struck off if that was me shown in last nights film. An accountant would probably face action from their body, a solicitor from the law society and a doctor from the medical council. What penalty do the individuals pay for their part in dodgy practices? Maybe I am wrong and they do face consequences but I haven't heard of them.
As for the institutions, they will not take this matter seriously until a campaign of name and shame starts and they start facing reputational risk. They will quiet happily pay fines as long as their names don't get mentioned.
As for the institutions, they will not take this matter seriously until a campaign of name and shame starts and they start facing reputational risk. They will quiet happily pay fines as long as their names don't get mentioned.
Dave Vanian
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There are two Representative Bodies - and . They are only open to brokers so the Permanent TSB staff last night would not be eligible to join. In any event, they are more like unions than regulators - if a broker gets thrown out of PIBA s/he can still operate.
The only body with the power to end a broker's career is the Financial Regulator.
The individuals concerned should hold the qualification QFA, Qualified Financial Advisor before being allowed to sell. The QFA is run by the Life Insurance Association.
One would hope that this body would take the appropriate action against those involved.
Bedlam
One would hope that this body would take the appropriate action against those involved.
Bedlam