Combined with todays early morning motion and debate in the House of Commons, I recently read an article in a professional magazine (MDRT, Round the Table, Commit to your future) which has prompted me to write this blog post.
The article discussed how keeping pace with change requires constantly renewing commitment to clients and the financial services profession.
It occurred to me this might be another area where I undertake a lot of work ‘backstage’ but I am guilty of not telling clients and putting it ‘frontstage’.
The financial services profession is often overloaded with uncertainty. Changes in economics, legislation, tax, Government, products, providers – the list is endless.
Even I am guilty in a small way having changed my company operating name a few times over the last few years.
In fact it seems change is the only certainty.
And this is true of other professions, not just the financial world.
I see part of my role for my clients in bringing certainty, in an uncertain world, to their financial life.
I find many clients are calling for an evolved adviser. They want someone who is always learning, adapting and growing with each change to the marketplace rather than retreating.
In the House of Commons today the FSA ‘RDR’ (Financial Services Authority Retail Distribution review) was being debated, with many MPs opposed on behalf of their local IFAs. There are parts of the RDR I am opposed to – I think that unfortunately it will make it easier for the banks to sell unsuitable products to the mass market – and thus continue ‘mis-selling scandals’ – but there are giant swathes of the RDR that I am massively in favour of.
One of these is education.
Since starting as an IFA (15 years and counting now) I have undertaken Continuing Professional Development each year. I also make sure I have at least the minimum educational requirements whenever they are changed (I currently have more than the minimum) and I continue to take exams in areas I operate in (next up is the Society of Tax and Estate Practioners Trust exams in early 2011)
Commitment to Education
As an adviser I believe education is the cornerstone of continued success for my clients. Not only what is in my head but also paying large sums of money each year for access to the very best professional minds and publications available. If I don’t know the answer myself, I know a man (or woman) that does.
But it is not just education that makes a financial adviser. So here are a few other commitments that I make personally and as Green Financial.
Commitment to Expertise
There is a difference of course between the kind of experience and knowledge I am referring to and that which anyone can google. If looking for an answer that has serious consequences for a client’s finances, I know I’d rather it was coming from the mouth of an expert in the field rather than Wikipedia! Information and data are everywhere, knowledge and wisdom are harder (and more expensive) to come by.
Commitment to Green Financial clients benefit
To analyze what is working in the business and re-evaluate any areas found in need of attention
Build long lasting strategic alliances and professional connections
Assemble a team of experts and professionals
Commitment direct to Green Financial Clients
To offer a bespoke, personalised service, where ‘everyone knows your name’
To strive to exceed expectations
If it ever goes wrong, admit it, and put it right
Help clients understand how new rules and regulations affect them personally
Maintain a genuine concern for clients’ objectives (see also http://www.iangreen.com/ethics.php )
Never, ever forget that it’s your money
Commitment to my professional standing
To give back, by being an active member of local, national and international professional organisations (see future blog post for more on this)
Strive to be on cutting edge, to lead and educate, but to retain traditional values
Learn from other professional experts
Tuesday, 30 November 2010
Thursday, 25 November 2010
Blue and Green Tomorrow - issue 1
I’ve recently been involved, as a founding supporter, in the launch of a new free magazine titled ‘Blue & Green Tomorrow’
* We're indebted to Douglas Adams for writing The Hitchhiker's Guide to the Galaxy, in which he describes Earth as "an utterly insignificant little blue-green planet". Now you know...
It is a magazine for those that want the planet to be as blue and green tomorrow as it was yesterday. (see end of this post for which famous author to thank for the name)
It is NOT just for tree huggers. It is for those that make positive choices where they can, when they can. Clean energy maybe, buying fair-trade goods, ethical investing (my area of expertise), recycling at home & the office and so on.
Nothing’s perfect though, and we all know we can usually do better.
Many companies are now operating with ‘people, profit & planet’ in mind. Sadly some aren’t, they just make the right noises. Blue & Green Tomorrow is not about ‘Greenwash’, where an organisation just pretends they are doing right – and it is not about sensational headlines. It will print good news but also report on bad.
It seeks to provide relevant, interesting, informative and enjoyable news and features.
There are a few sample pages from the first edition here. The front cover, the editorial, my specialist subject ‘ethical investing’ and just to ‘bee’ different (ahem), an article on what bees are doing and what might happen if they stop doing it!
If you’d like a copy, drop me an email at iangreen@iangreen.com with your postal address and I’ll rush one out to you.
Alternatively you could sign up for the e-newsletter at www.blueandgreentomorrow.com/register
I hope you enjoy it.
Ian Green
Blue and Green Tomorrow magazine
Founding Supporter
* We're indebted to Douglas Adams for writing The Hitchhiker's Guide to the Galaxy, in which he describes Earth as "an utterly insignificant little blue-green planet". Now you know...
Tuesday, 23 November 2010
Banks - Treating Customers Fairly (Badly) 2
Following yesterday’s blog, about how I feel banks are not really entering into the spirit of the FSA's 'Treating Customers Fairly' initiative, just a quick follow up on bank advertising and marketing tactics.
I should be clear, I am not naïve. I understand the power of marketing and advertising as much as the next person. What irks me is the way that banks and other direct financial product sellers operate in a vacuum and in a fashion that independent financial advisers don’t.
So I am happy if they want to play in the same space as retailers and have an advertising battle a la the supermarket price comparisons (eg best interest rate rather than cheapest baked beans) but it troubles me that they seem to almost mislead with their advertising safe in the knowledge they can hide behind the ‘small print’ and wriggle out of complaints.
This year the banks have had more complaints than ever made against them over product sales (excluding anything to do with the credit crunch)
It is not that these products are necessarily bad (although some are), it is just the constant cross selling of almost anything to anyone (just like my post office gripe yesterday) who walks through their door.
So as promised, I trotted down Putney High Street, read a paper and watched a bit of prime time TV to select a few bank ads that irked me: (It didn't take long!)
TV: Halifax – radio jingle advert telling us how much they love their customers – so much so that they will give you £5 a month if you pay in £1,000 a month and have your current account with them.
Dig a bit deeper – so that is 0.5% of the £1,000. You get nothing more, for any more saved. Plus they know have you as a customer to cross sell – and they make a great deal more than 0.5% profit margin on all the other stuff they’ll now bombard you with!
But it gets better. The ad even tries to ‘upsell you’ to their ‘rewards’ account. In the background the radio is now playing ‘Lucky You’ as they tell you all the rewards you can have. Only in the small print at the bottom of the screen is it now saying you need to pay them £12.50 a month for these ‘rewards’ – Lucky You!
Newspaper: Abbey/Santander – “Earn £100 and 5% for 12 months when you switch to Santander” – little table showing how this deal appears better than 5 other banks. Doesn’t mention anywhere that First Direct, for example, will also give you £100 to switch to them! As with Halifax, no interest on anything over the £2,500 and you need £1,000 minimum. I think it would be great to just play them at their game, switch a few direct debits, pay in the money, and take the maximum £1,500 interest! Again, I don’t have a problem per se with the deal, it just irks me that ‘terms and conditions apply’ yet the adverts (press, TV, billboard) mainly show the £100 and 5% figures in giant neon numerals on top of a building. And if anyone complained about being mislead, the small print would ensure Santander would have done no wrong.
High Street : NatWest – the charter. Don’t get me started. On the one hand I applaud their intention, if true, to become the most ‘helpful’ bank. Having more branches, more branches open, longer hours etc are all things to improve what they do. But on the other hand, woolly commitments to ‘try’ a bit harder at stuff are not so impressive. Nor is the amount of volunteer days/hours they say they give when divided up amongst the number of employees and I’m afraid the NatWest in schools leaves me feeling a little cynical over whether they really are trying to help educate the nation or perhaps just be first past the post when the time comes to open student accounts?
Personal experience: three clients in the last three months have approached me saying they were going to take out a product recommended by a bank employee. Without going into the details, constant theme across all three (a high street bank, a smaller building society, a private bank) were bank employee bringing up the subject when another item was the main discussion, the investment product was complex and the complexities were not explained but boiled down to an eye catching headline (see Santander above), the product was sold as an alternative and comparable to cash but clearly is no such thing, elements of the product not at all suitable for the client (time scales, risk factors etc)
So to bring things back to the start, I don’t have an issue with the banks, or the products themselves - and certainly not the staff personally – they are just sales targeted and told what to sell – I assume they have mortgages to pay too…
It is just that clients are being shown (or worse, just told and not shown) attention grabbing headlines: “5%”, “34% over 4 years”, “no risk” and it is not the whole story.
In summary, I don’t believe the banks are being anywhere near as fair, friendly or helpful as their marketing and adverts would have us believe. But perhaps I am just naive...
I should be clear, I am not naïve. I understand the power of marketing and advertising as much as the next person. What irks me is the way that banks and other direct financial product sellers operate in a vacuum and in a fashion that independent financial advisers don’t.
So I am happy if they want to play in the same space as retailers and have an advertising battle a la the supermarket price comparisons (eg best interest rate rather than cheapest baked beans) but it troubles me that they seem to almost mislead with their advertising safe in the knowledge they can hide behind the ‘small print’ and wriggle out of complaints.
This year the banks have had more complaints than ever made against them over product sales (excluding anything to do with the credit crunch)
It is not that these products are necessarily bad (although some are), it is just the constant cross selling of almost anything to anyone (just like my post office gripe yesterday) who walks through their door.
So as promised, I trotted down Putney High Street, read a paper and watched a bit of prime time TV to select a few bank ads that irked me: (It didn't take long!)
TV: Halifax – radio jingle advert telling us how much they love their customers – so much so that they will give you £5 a month if you pay in £1,000 a month and have your current account with them.
Dig a bit deeper – so that is 0.5% of the £1,000. You get nothing more, for any more saved. Plus they know have you as a customer to cross sell – and they make a great deal more than 0.5% profit margin on all the other stuff they’ll now bombard you with!
But it gets better. The ad even tries to ‘upsell you’ to their ‘rewards’ account. In the background the radio is now playing ‘Lucky You’ as they tell you all the rewards you can have. Only in the small print at the bottom of the screen is it now saying you need to pay them £12.50 a month for these ‘rewards’ – Lucky You!
Newspaper: Abbey/Santander – “Earn £100 and 5% for 12 months when you switch to Santander” – little table showing how this deal appears better than 5 other banks. Doesn’t mention anywhere that First Direct, for example, will also give you £100 to switch to them! As with Halifax, no interest on anything over the £2,500 and you need £1,000 minimum. I think it would be great to just play them at their game, switch a few direct debits, pay in the money, and take the maximum £1,500 interest! Again, I don’t have a problem per se with the deal, it just irks me that ‘terms and conditions apply’ yet the adverts (press, TV, billboard) mainly show the £100 and 5% figures in giant neon numerals on top of a building. And if anyone complained about being mislead, the small print would ensure Santander would have done no wrong.
High Street : NatWest – the charter. Don’t get me started. On the one hand I applaud their intention, if true, to become the most ‘helpful’ bank. Having more branches, more branches open, longer hours etc are all things to improve what they do. But on the other hand, woolly commitments to ‘try’ a bit harder at stuff are not so impressive. Nor is the amount of volunteer days/hours they say they give when divided up amongst the number of employees and I’m afraid the NatWest in schools leaves me feeling a little cynical over whether they really are trying to help educate the nation or perhaps just be first past the post when the time comes to open student accounts?
Personal experience: three clients in the last three months have approached me saying they were going to take out a product recommended by a bank employee. Without going into the details, constant theme across all three (a high street bank, a smaller building society, a private bank) were bank employee bringing up the subject when another item was the main discussion, the investment product was complex and the complexities were not explained but boiled down to an eye catching headline (see Santander above), the product was sold as an alternative and comparable to cash but clearly is no such thing, elements of the product not at all suitable for the client (time scales, risk factors etc)
So to bring things back to the start, I don’t have an issue with the banks, or the products themselves - and certainly not the staff personally – they are just sales targeted and told what to sell – I assume they have mortgages to pay too…
It is just that clients are being shown (or worse, just told and not shown) attention grabbing headlines: “5%”, “34% over 4 years”, “no risk” and it is not the whole story.
In summary, I don’t believe the banks are being anywhere near as fair, friendly or helpful as their marketing and adverts would have us believe. But perhaps I am just naive...
Monday, 22 November 2010
Banks - Treating Customers Fairly (Badly)
Banks – Treating Customers Fairly?
The Financial Services Authority (FSA) have a long standing aim/theme named Treating Customers Fairly (TCF) for those in financial services.
Many IFA firms spend large sums of money and/or commit huge resource to ensuring that they not only act in the spirit of TCF (and frankly without that, as a small business they would wither and die anyway) but also comply with the TCF guidelines.
Yet it would appear big name banks, both private and high street, whilst outwardly appearing to comply with TCF guidelines don’t actually treat customers fairly in many ways.
This was picked up by the weekend FT (see link below) where they discussed how now even the private banks, whose traditional focus was on excellent customer service, are now simply trying to cross-sell more product in order to remain profitable, as simply having customers holding accounts makes them no or little money – or even loses them money.
So what we are hearing is that banks don’t make money by selling their core business proposition so they think it is alright to sell (often) non suitable product to their customers to make up their profits. Hardly Treating Customers Fairly?
http://www.ft.com/cms/s/2/d2bf65be-f3f1-11df-901e-00144feab49a.html#axzz1609LK54U
I have posted and discussed on a number of professional forums about the less than savoury tactics of banks and below I have copied a number of replies.
It is a shame that banks (even ignoring the current bad feeling towards them post credit crunch) have been unable to stay profitable at what they should be doing (banking)
– it reminds me of the Royal Mail. When I go into my local main post office all I normally want to do is post a special delivery parcel and get out again but the people behind the (franchised?) counter are more interested in selling me holiday money or contents insurance…
Below, my posts are labelled, otherwise they are anonymous here but were named on the original posts on professional private forums.
IG – posted Oct2010 : Banks - Private Wealth Managers?I have noticed a number of my clients have had renewed and vigorous attention from their banks recently either upselling them to a private banking service or if already subscribed, trying to sell them what are essentially multimanager portfolios dressed up as full wealth management.
A few have then attempted to (at worst) rubbish my advice or (at best) just start to attempt to undermine the client and ask questions of me.
On the one hand I am entirely open to this and welcome the opportunity for my advice and value to be queried by a third party and I am happy to stand by my advice and service.
But at the back of my mind I am thinking that the high street banks are not making money elsewhere and need to sell this type of service - thus they are throwing a lot of money at pushing these services - far more than I can ever do.
REPLIES: I have just had a simular battle with Lloyds TSB and Barclay's private banking. The client had used them for some time. The client was not aware of the cost of these services as they had never been explained to him.
"The level of personal service has never been as good with the banks as it is with me", his words not mine.
He has had a least 2 different account managers in 3 years.
REPLY: Your strength is the level of personal service that you provide for your client ,which a bank cannot provide, even though they will promise to.
Ian, knowing you as I do I would simply point to experience and excellence - have recently "won" over £3million from a Bank and their Wealth Management arm, based on doing what we said we'd do, providing a broader spread of advice than just the "product" (a perfectly fine one, but no tax considerations given) recommended by the Bank, and our reputation/ integrity, built locally and further afield over many years. Like the internet, Banks tend to provide excellent information, when what is really needed is wisdom and knowledge.
REPLY: Previously I worked in a Private Banking environment and clearly understand your point raised. It has, and still does, sadden me that Banks create the impression that they are the first and last line in administering all things financial, including financial planning advice. I have witnessed first hand the aggressive 'pitch' that these so called financial experts use to 'entice' their prey (sorry, I mean clients). I always resisted this approach and preferred to deal with my clients fairly and without bias...........obviously, taking a professional and ethical stance with my clients did me no favours when it came to hitting the ludicrously high 'sales' targets set.
I am pleased to say that I am now working as a fully fledged IFA and am happy to take on the 'might' of the banks financial advisors because, having experienced first hand the general levels of incompetence, I know that greater professionalism and knowledge will prevail through the IFA medium.
REPLY: In terms of what you can , in my mind, is quite simple. Keep being the expert financial planner you are. There is no way that these advisors will provide the levels of service, information and quality advice that you can. The one thing that is of enormous advantage to us as IFA's is that we will not grow bored of our clients. I guess it is a fact of life that we will always lose the odd client to competition but in the main, given the amount of personal and professional commitment we give to our clients, this should see us prevail.
Naturally, any clients that are lost, we should be prepared to quickly welcome them back once they have seen their serious error of judgement.
IG post – Sept 1010 A client gave me valuation sheet prepared by [High Street Bank] Financial Planning1. still lists PEPs
2. PEPs listed as owner=joint
3. ISAs listed as owner=joint
But this is the best bit - under the "valuations summary" it says:
"This information has been prepared...as part of our committment to client service and does not represent an official valuation of your investments...B******s Financial Planning makes no representations or warranties to you about its accuracy or completeness"
So, a valuation that is not a valuation, and if it is, don't expect it to be complete or accurate!
IG Post – Aug 2010: A few years back I recommended Chelsea Building Society for a client of mine for an instant access deposit account.
They had decent rates and crucially, were just down the road from the client who puts great stock in being able to walk into a branch.
Despite me sending in the forms they have continued to try to cross sell the client over the years - this is the latest! :
Remember - this is cash the client needs for instant access...
A 1 year fixed bond paying 6% (so far so good-ish)... combined with an Aviva 5 year defined returns fund - so returns dependant on FTSE100, counterparty risk, money locked away for 5 years...all for a client with low risk profile...
I have just spent 20 mins with this client explaining the above because they left the meeting with the impression it was low risk and instant access.
You can't make this up...
REPLY: Nationwide is another who have done similar things and I could name others. You recommend a client keeps money back for short term needs and emergencies and these clowns come along and stitch up the client. And it is you or the client that pays for putting it right. Then there is the scam whereby you go into the bank to improve the rate that you are currently getting having seen it advertised but you cannot get the best rate unless you meet with their branch adviser. It is then denied that this is the case when you phone in to head office.......
REPLY: Hi guys I've had this with the Halifax - I recommended a 1 year fixed rate bond to client - they provided her with an Investment Bond.
By the time I saw documentation some 6 months plus later client's plan had gone up in value but she couldn't get out without a tax charge due to income etc. She wouldn't complain as she didn't like to make a fuss.
I saw copy of SR which said nothing about it being short term monies and that Tax Planning etc not covered as client had her own IFA doing this for her!!!! Well I was until some stupid so called bank employee stuffed up what I had been doing for her.....
The staff member was not happy when I questioned why this had been done - my client thought it was instant access as he'd told her there were no exit penalties (correct - but forgot to tell her about potential tax penalties on encashment etc etc).
Next time I recommended a client did cash (same one incidentally) I went and picked up the application and completed it on her behalf and although I didn't go in with her to set up the plan advised her to say "no" to their pressure to see an adviser..... Incidentally, when I asked for the application in the branch on her behalf, they didn't want to give it to me as the people behind the counter said I "couldn't advise clients on their products, only their advisers could" I couldn't stop laughing once the red mist had disappeared!
REPLY: Hi all, a very interesting debate, and one which sadly, will go on and on until the Banks are held accountable for their aggressive sales tactics. I have, unfortunately, worked in this environment in the past and am all too aware of the strategies employed by these 'so called money experts' - said by the way in the loosest possible terms. I am pleased to say that I have now left this petty and arrogant environment behind having refused to follow their rancid code of conducting business. Like you all, our clients deserve advice with integrity and merit and only when they can be steered away from this vile culture can they truly access such advice.
REPLY: Don't you just love 'em.....clients looking for life and CIC ask Lloyds. it comes in at a competitive price, but everyone forgets to mention that it is reviewable. Luckily I manage to get to them before they sign on dotted line, and for £1 more get them guaranteed premiums and cover them for 10 more critical illnesses.
Having discussed this with someone I know who used to work for Lloyds, they said 'oh yes, they get more points towards their targets for reviewable', we were told to sell our cover on the basis that we are much more reputable than an IFA being a high street bank, even if it costs them more! it may well have been going to be put in the SL by Lloyds, but sure as hell no-one was going to bring their attention to it!!!
I just don't understand how they get away with it,
REPLY: I recall a broker consultant from one of the bailed out banks telling me that even though he had increased his sales because he hadn’t hit his target on a certain product sales he wouldn’t be getting a bonus.
This just proves that banks target specific products to the detriment of clients.
IAN: And in closing, my final bug bear, which I’ll compile a few examples of for another post is adverts showing interest rates that look comparable with standard deposit rates yet have either complex financial instruments behind them or multiple requirements that benefit the bank before you get the rate…
The Financial Services Authority (FSA) have a long standing aim/theme named Treating Customers Fairly (TCF) for those in financial services.
Many IFA firms spend large sums of money and/or commit huge resource to ensuring that they not only act in the spirit of TCF (and frankly without that, as a small business they would wither and die anyway) but also comply with the TCF guidelines.
Yet it would appear big name banks, both private and high street, whilst outwardly appearing to comply with TCF guidelines don’t actually treat customers fairly in many ways.
This was picked up by the weekend FT (see link below) where they discussed how now even the private banks, whose traditional focus was on excellent customer service, are now simply trying to cross-sell more product in order to remain profitable, as simply having customers holding accounts makes them no or little money – or even loses them money.
So what we are hearing is that banks don’t make money by selling their core business proposition so they think it is alright to sell (often) non suitable product to their customers to make up their profits. Hardly Treating Customers Fairly?
http://www.ft.com/cms/s/2/d2bf65be-f3f1-11df-901e-00144feab49a.html#axzz1609LK54U
I have posted and discussed on a number of professional forums about the less than savoury tactics of banks and below I have copied a number of replies.
It is a shame that banks (even ignoring the current bad feeling towards them post credit crunch) have been unable to stay profitable at what they should be doing (banking)
– it reminds me of the Royal Mail. When I go into my local main post office all I normally want to do is post a special delivery parcel and get out again but the people behind the (franchised?) counter are more interested in selling me holiday money or contents insurance…
Below, my posts are labelled, otherwise they are anonymous here but were named on the original posts on professional private forums.
IG – posted Oct2010 : Banks - Private Wealth Managers?I have noticed a number of my clients have had renewed and vigorous attention from their banks recently either upselling them to a private banking service or if already subscribed, trying to sell them what are essentially multimanager portfolios dressed up as full wealth management.
A few have then attempted to (at worst) rubbish my advice or (at best) just start to attempt to undermine the client and ask questions of me.
On the one hand I am entirely open to this and welcome the opportunity for my advice and value to be queried by a third party and I am happy to stand by my advice and service.
But at the back of my mind I am thinking that the high street banks are not making money elsewhere and need to sell this type of service - thus they are throwing a lot of money at pushing these services - far more than I can ever do.
REPLIES: I have just had a simular battle with Lloyds TSB and Barclay's private banking. The client had used them for some time. The client was not aware of the cost of these services as they had never been explained to him.
"The level of personal service has never been as good with the banks as it is with me", his words not mine.
He has had a least 2 different account managers in 3 years.
REPLY: Your strength is the level of personal service that you provide for your client ,which a bank cannot provide, even though they will promise to.
Ian, knowing you as I do I would simply point to experience and excellence - have recently "won" over £3million from a Bank and their Wealth Management arm, based on doing what we said we'd do, providing a broader spread of advice than just the "product" (a perfectly fine one, but no tax considerations given) recommended by the Bank, and our reputation/ integrity, built locally and further afield over many years. Like the internet, Banks tend to provide excellent information, when what is really needed is wisdom and knowledge.
REPLY: Previously I worked in a Private Banking environment and clearly understand your point raised. It has, and still does, sadden me that Banks create the impression that they are the first and last line in administering all things financial, including financial planning advice. I have witnessed first hand the aggressive 'pitch' that these so called financial experts use to 'entice' their prey (sorry, I mean clients). I always resisted this approach and preferred to deal with my clients fairly and without bias...........obviously, taking a professional and ethical stance with my clients did me no favours when it came to hitting the ludicrously high 'sales' targets set.
I am pleased to say that I am now working as a fully fledged IFA and am happy to take on the 'might' of the banks financial advisors because, having experienced first hand the general levels of incompetence, I know that greater professionalism and knowledge will prevail through the IFA medium.
REPLY: In terms of what you can , in my mind, is quite simple. Keep being the expert financial planner you are. There is no way that these advisors will provide the levels of service, information and quality advice that you can. The one thing that is of enormous advantage to us as IFA's is that we will not grow bored of our clients. I guess it is a fact of life that we will always lose the odd client to competition but in the main, given the amount of personal and professional commitment we give to our clients, this should see us prevail.
Naturally, any clients that are lost, we should be prepared to quickly welcome them back once they have seen their serious error of judgement.
IG post – Sept 1010 A client gave me valuation sheet prepared by [High Street Bank] Financial Planning1. still lists PEPs
2. PEPs listed as owner=joint
3. ISAs listed as owner=joint
But this is the best bit - under the "valuations summary" it says:
"This information has been prepared...as part of our committment to client service and does not represent an official valuation of your investments...B******s Financial Planning makes no representations or warranties to you about its accuracy or completeness"
So, a valuation that is not a valuation, and if it is, don't expect it to be complete or accurate!
IG Post – Aug 2010: A few years back I recommended Chelsea Building Society for a client of mine for an instant access deposit account.
They had decent rates and crucially, were just down the road from the client who puts great stock in being able to walk into a branch.
Despite me sending in the forms they have continued to try to cross sell the client over the years - this is the latest! :
Remember - this is cash the client needs for instant access...
A 1 year fixed bond paying 6% (so far so good-ish)... combined with an Aviva 5 year defined returns fund - so returns dependant on FTSE100, counterparty risk, money locked away for 5 years...all for a client with low risk profile...
I have just spent 20 mins with this client explaining the above because they left the meeting with the impression it was low risk and instant access.
You can't make this up...
REPLY: Nationwide is another who have done similar things and I could name others. You recommend a client keeps money back for short term needs and emergencies and these clowns come along and stitch up the client. And it is you or the client that pays for putting it right. Then there is the scam whereby you go into the bank to improve the rate that you are currently getting having seen it advertised but you cannot get the best rate unless you meet with their branch adviser. It is then denied that this is the case when you phone in to head office.......
REPLY: Hi guys I've had this with the Halifax - I recommended a 1 year fixed rate bond to client - they provided her with an Investment Bond.
By the time I saw documentation some 6 months plus later client's plan had gone up in value but she couldn't get out without a tax charge due to income etc. She wouldn't complain as she didn't like to make a fuss.
I saw copy of SR which said nothing about it being short term monies and that Tax Planning etc not covered as client had her own IFA doing this for her!!!! Well I was until some stupid so called bank employee stuffed up what I had been doing for her.....
The staff member was not happy when I questioned why this had been done - my client thought it was instant access as he'd told her there were no exit penalties (correct - but forgot to tell her about potential tax penalties on encashment etc etc).
Next time I recommended a client did cash (same one incidentally) I went and picked up the application and completed it on her behalf and although I didn't go in with her to set up the plan advised her to say "no" to their pressure to see an adviser..... Incidentally, when I asked for the application in the branch on her behalf, they didn't want to give it to me as the people behind the counter said I "couldn't advise clients on their products, only their advisers could" I couldn't stop laughing once the red mist had disappeared!
REPLY: Hi all, a very interesting debate, and one which sadly, will go on and on until the Banks are held accountable for their aggressive sales tactics. I have, unfortunately, worked in this environment in the past and am all too aware of the strategies employed by these 'so called money experts' - said by the way in the loosest possible terms. I am pleased to say that I have now left this petty and arrogant environment behind having refused to follow their rancid code of conducting business. Like you all, our clients deserve advice with integrity and merit and only when they can be steered away from this vile culture can they truly access such advice.
REPLY: Don't you just love 'em.....clients looking for life and CIC ask Lloyds. it comes in at a competitive price, but everyone forgets to mention that it is reviewable. Luckily I manage to get to them before they sign on dotted line, and for £1 more get them guaranteed premiums and cover them for 10 more critical illnesses.
Having discussed this with someone I know who used to work for Lloyds, they said 'oh yes, they get more points towards their targets for reviewable', we were told to sell our cover on the basis that we are much more reputable than an IFA being a high street bank, even if it costs them more! it may well have been going to be put in the SL by Lloyds, but sure as hell no-one was going to bring their attention to it!!!
I just don't understand how they get away with it,
REPLY: I recall a broker consultant from one of the bailed out banks telling me that even though he had increased his sales because he hadn’t hit his target on a certain product sales he wouldn’t be getting a bonus.
This just proves that banks target specific products to the detriment of clients.
IAN: And in closing, my final bug bear, which I’ll compile a few examples of for another post is adverts showing interest rates that look comparable with standard deposit rates yet have either complex financial instruments behind them or multiple requirements that benefit the bank before you get the rate…
Friday, 5 November 2010
Ian Green wins Award
I am delighted to announce I have been named runner up in the Social Media Financial Adviser of the year Awards 2010.
http://ow.ly/i/5d8y
At the start of 2010 my social media status was really limited to the fact that I had dabbled in LinkedIn for a while but not really made much of it.
LinkedIn: http://uk.linkedin.com/in/ianjamesgreen
Then, after attending a seminar and hearing about the virtues of a ‘proper’ online presence I made it my immediate mission to improve my output.
I immediately fully updated my LinkedIn profile and in short order also created a twitter account.
Twitter follow: @ianjamesgreen
After a brief period deciding whether to split personal and business etc I settled on a style and format that matched the image I present to clients. That of a personalised,
bespoke, not too stuffy IFA.
I market my services on this basis ‘offline’ so ensured my online presence matched it.
At the same time I joined an IFA online forum (www.ifalife.com) and have contributed over the months since, both posing questions and offering solutions where appropriate. I also hope the odd jovial aside has raised a smile or chuckle amongst my colleagues.
I then commissioned a brand new website, from scratch, and have had many positive comments, mostly along the lines that it differs greatly from most IFA websites and really gives a flavour of what I do, how I do it and who I am – as opposed to just being a brochure or selling a policy online.
See my Website for yourself at www.iangreen.com
Since then I have created a facebook for business page which has also gathered positive comment (Search for ‘Green Financial’on Facebook search) and I am a consistent poster using desktop, home, iPhone and blackberry sources to ensure continuous service unhindered by my physical location.
Integration of all this, bringing it to a cohesive and useful tool, rather than just a lot of online status postings is demonstrated by, for example, me utilising foursquare.com, linked with twitter and LinkedIn to update my geographic and access status. This means clients can see where I am and what I am doing if they are trying to contact me. They don’t need to be a tweeter or on LinkedIn as the feed shows on the homepage of my website, giving access to all. It remains confidential (which I think is important) as I never disclose actual client names or places, just general info.
But from a business perspective does this activity justify itself? Is it ‘worth it?’
I have received a referral from an existing client who saw I was in a certain location via twitter and mentioned they had a friend there – thus I was able to introduce myself and develop the relationship from there.
Another client who works in the new media, music and arts world cited my online presence and activity as evidence that I was "a progressive financial adviser, aware of modern methods, providing a modern service, combined with the traditional face to face service" thereafter as needed.
In the last few months I have also been blogging which has proved very popular. One in particular (a scan and comment on a 1950’s Midland Bank booklet) was picked up by ‘This is Money’ and ‘The Daily Mail’ and was retweeted to tens of thousands of twitterers.
http://greenfinancial.blogspot.com/2010/09/1959-midland-bank-how-to-open-account.html
I’m delighted that positive feedback on my social media presence has been provided by clients, friends, peers and suppliers leading me to be nominated for and to win this award.
http://ow.ly/i/5d8y
At the start of 2010 my social media status was really limited to the fact that I had dabbled in LinkedIn for a while but not really made much of it.
LinkedIn: http://uk.linkedin.com/in/ianjamesgreen
Then, after attending a seminar and hearing about the virtues of a ‘proper’ online presence I made it my immediate mission to improve my output.
I immediately fully updated my LinkedIn profile and in short order also created a twitter account.
Twitter follow: @ianjamesgreen
After a brief period deciding whether to split personal and business etc I settled on a style and format that matched the image I present to clients. That of a personalised,
bespoke, not too stuffy IFA.
I market my services on this basis ‘offline’ so ensured my online presence matched it.
At the same time I joined an IFA online forum (www.ifalife.com) and have contributed over the months since, both posing questions and offering solutions where appropriate. I also hope the odd jovial aside has raised a smile or chuckle amongst my colleagues.
I then commissioned a brand new website, from scratch, and have had many positive comments, mostly along the lines that it differs greatly from most IFA websites and really gives a flavour of what I do, how I do it and who I am – as opposed to just being a brochure or selling a policy online.
See my Website for yourself at www.iangreen.com
Since then I have created a facebook for business page which has also gathered positive comment (Search for ‘Green Financial’on Facebook search) and I am a consistent poster using desktop, home, iPhone and blackberry sources to ensure continuous service unhindered by my physical location.
Integration of all this, bringing it to a cohesive and useful tool, rather than just a lot of online status postings is demonstrated by, for example, me utilising foursquare.com, linked with twitter and LinkedIn to update my geographic and access status. This means clients can see where I am and what I am doing if they are trying to contact me. They don’t need to be a tweeter or on LinkedIn as the feed shows on the homepage of my website, giving access to all. It remains confidential (which I think is important) as I never disclose actual client names or places, just general info.
But from a business perspective does this activity justify itself? Is it ‘worth it?’
I have received a referral from an existing client who saw I was in a certain location via twitter and mentioned they had a friend there – thus I was able to introduce myself and develop the relationship from there.
Another client who works in the new media, music and arts world cited my online presence and activity as evidence that I was "a progressive financial adviser, aware of modern methods, providing a modern service, combined with the traditional face to face service" thereafter as needed.
In the last few months I have also been blogging which has proved very popular. One in particular (a scan and comment on a 1950’s Midland Bank booklet) was picked up by ‘This is Money’ and ‘The Daily Mail’ and was retweeted to tens of thousands of twitterers.
http://greenfinancial.blogspot.com/2010/09/1959-midland-bank-how-to-open-account.html
I’m delighted that positive feedback on my social media presence has been provided by clients, friends, peers and suppliers leading me to be nominated for and to win this award.
Thursday, 4 November 2010
Boffins and odds
I recently met with a fund manager, a research analyst and an investment house representative (this is sounding like the start to a dull joke!) who were keen to foist upon me a big, glossy, heavy tome titled ‘Global Equity Strategy’.
Suspecting it was a volume more suited to a fund manager than me and not wanting to commit to reading hundreds of pages that would not add any value to my clients or my business I asked if they could give me a simple overview before I took it and agreed to digest it.
The succinct answer was “It’s a summary of a load of work done by boffins”
Nevertheless, having read it (well, most of it) I'll pass on one fact - If there are 1,894 funds to pick from, the chances of picking the best one, 3 years in a row, are 6,794,224,983 to 1
Suspecting it was a volume more suited to a fund manager than me and not wanting to commit to reading hundreds of pages that would not add any value to my clients or my business I asked if they could give me a simple overview before I took it and agreed to digest it.
The succinct answer was “It’s a summary of a load of work done by boffins”
Nevertheless, having read it (well, most of it) I'll pass on one fact - If there are 1,894 funds to pick from, the chances of picking the best one, 3 years in a row, are 6,794,224,983 to 1
Wednesday, 3 November 2010
Ask the Expert - then do the opposite?
Free advice – Is it worth it?
There is much chatter amongst the financial adviser community at present of 'RDR', that is, the FSA ‘Retail Distribution Review'.
It means many things but a few of the items being legislated upon financial advisers is fee charging instead of commission and a higher level of qualification. My clients will be aware that I already have the level of qualification being set so that causes me no issues and I have had fees instead of commission as an option since the year 2000.
Some financial advisers are lobbying their MPs AGAINST RDR whereas I warmly welcome RDR.
As can be read on my website (http://www.iangreen.com/approach.php) I provide the ability to purchase as much or as little guidance and advice as a client wishes.
Two recent direct quotes from clients when asked what I do for them in terms of financial planning:
“I just point them in the right direction" or I "hold their hand from start to finish"
I offer specific project fees, investment management based fees and if requested, hourly rates for some work.
For me this approach came about when I decided (at the turn of the millennium when first setting up my own business) that it didn’t make commercial sense to have my company income dictated by a third party – ie product providers and their commission.
So RDR is due to be implemented in 2012 and until then, unfortunately, many financial advisers still give the impression that a commission generating product is somehow ‘free’ to the client. For over a decade now I have been at pains to point out to clients that even if they opt for me to be paid a commission (which sometimes works out cheaper and/or better value) it is not ‘free’. The cost simply is bundled into the product.
Which brings me to the title of this blog. I remember reading an article a few years ago by Toby Young, spectator columnist and author of ‘How to lose friends and alienate people’. He told how three times he had sought the ‘free’ advice of acquaintances or ‘friends in the city’ who were ‘experts’ in their field.
* He consulted an economic analyst regarding interest rates for his mortgage – he followed their free advice – and lost out
* He consulted a currency speculator on whether he should be paid in pounds or dollars for the rights to his film – he followed their free advice – and lost out
* He consulted a friend who specialised in securitising debt regarding an overseas deal buying a property from a bankrupt firm - he followed their free advice – and lost out.
Toby Young ended the article light heartedly saying that sharp eyed readers would notice that despite his losses he kept going back to ‘friends in the city’ for ‘free advice’. He ended by stating “The truth is, I’m too mean to actually pay a financial advisor to give me some proper advice. However, even someone as innumerate as me is beginning to realise that this is a false economy”
So if you are in the market for financial advice, don’t ‘lose friends and alienate people’ by following Toby’s example. Don’t even try to obtain ‘free’ advice from a financial adviser. Consult an adviser and pay a professional fee for professional advice. Because you’re worth it!
There is much chatter amongst the financial adviser community at present of 'RDR', that is, the FSA ‘Retail Distribution Review'.
It means many things but a few of the items being legislated upon financial advisers is fee charging instead of commission and a higher level of qualification. My clients will be aware that I already have the level of qualification being set so that causes me no issues and I have had fees instead of commission as an option since the year 2000.
Some financial advisers are lobbying their MPs AGAINST RDR whereas I warmly welcome RDR.
As can be read on my website (http://www.iangreen.com/approach.php) I provide the ability to purchase as much or as little guidance and advice as a client wishes.
Two recent direct quotes from clients when asked what I do for them in terms of financial planning:
“I just point them in the right direction" or I "hold their hand from start to finish"
I offer specific project fees, investment management based fees and if requested, hourly rates for some work.
For me this approach came about when I decided (at the turn of the millennium when first setting up my own business) that it didn’t make commercial sense to have my company income dictated by a third party – ie product providers and their commission.
So RDR is due to be implemented in 2012 and until then, unfortunately, many financial advisers still give the impression that a commission generating product is somehow ‘free’ to the client. For over a decade now I have been at pains to point out to clients that even if they opt for me to be paid a commission (which sometimes works out cheaper and/or better value) it is not ‘free’. The cost simply is bundled into the product.
Which brings me to the title of this blog. I remember reading an article a few years ago by Toby Young, spectator columnist and author of ‘How to lose friends and alienate people’. He told how three times he had sought the ‘free’ advice of acquaintances or ‘friends in the city’ who were ‘experts’ in their field.
* He consulted an economic analyst regarding interest rates for his mortgage – he followed their free advice – and lost out
* He consulted a currency speculator on whether he should be paid in pounds or dollars for the rights to his film – he followed their free advice – and lost out
* He consulted a friend who specialised in securitising debt regarding an overseas deal buying a property from a bankrupt firm - he followed their free advice – and lost out.
Toby Young ended the article light heartedly saying that sharp eyed readers would notice that despite his losses he kept going back to ‘friends in the city’ for ‘free advice’. He ended by stating “The truth is, I’m too mean to actually pay a financial advisor to give me some proper advice. However, even someone as innumerate as me is beginning to realise that this is a false economy”
So if you are in the market for financial advice, don’t ‘lose friends and alienate people’ by following Toby’s example. Don’t even try to obtain ‘free’ advice from a financial adviser. Consult an adviser and pay a professional fee for professional advice. Because you’re worth it!
Monday, 1 November 2010
"We have a big deal here" - SPAM!
I just had to post this spam email I received. Hilarious stuff.
I especially like the idea of the lawyer wanting me to help 'distribute the dough'.
and remember - "We have a big deal here"
Dear Ian Green,
This letter is reaching you as it was necessitated by my urgent need to get your response. Am, Barrister Chandra Sekharan an Attorney at law. A deceased client of my with the given name Late Mr. Alexander Green, who died as the result of a heart-related clause on the 12th July, 2007. Well I have contacted you to assist me in the distributing the dough/money left behind my late client, since you have the same suffix/last name. The bank have issued me a notice to present his beneficiary or it will be abstracted/confisicated if no present deviser/next of kins, as un-serviceable by the Bank which the deposit is esteemed at, [18.042m.USD] and plead you to reply this mail (Remember we have a big deal here).
My proposition to you is to seek your consent as to present you as his beneficiary, since you have matched suffix/last with my late client, so that the tranfer will be debited to you. All I require is your honest and cooperation during this transaction. (This operation will be executed under a justified array that will shield you from many contravene of the law.)This matter will be treated privatly with absolute confidentiality as well as upmost sincerity. I look forward to your quick reply.
Best Regards,
Barrister Chandra Sekharan
(Principal Attorney)
This message was sent by: Chand Sekharan & Associates, No. 62, Jalan Perak,Taman Kolam Air, 80200 Johor Bahru. Malaysia, Taman Kolam Air, Johor Bahru 56000
I especially like the idea of the lawyer wanting me to help 'distribute the dough'.
and remember - "We have a big deal here"
Dear Ian Green,
This letter is reaching you as it was necessitated by my urgent need to get your response. Am, Barrister Chandra Sekharan an Attorney at law. A deceased client of my with the given name Late Mr. Alexander Green, who died as the result of a heart-related clause on the 12th July, 2007. Well I have contacted you to assist me in the distributing the dough/money left behind my late client, since you have the same suffix/last name. The bank have issued me a notice to present his beneficiary or it will be abstracted/confisicated if no present deviser/next of kins, as un-serviceable by the Bank which the deposit is esteemed at, [18.042m.USD] and plead you to reply this mail (Remember we have a big deal here).
My proposition to you is to seek your consent as to present you as his beneficiary, since you have matched suffix/last with my late client, so that the tranfer will be debited to you. All I require is your honest and cooperation during this transaction. (This operation will be executed under a justified array that will shield you from many contravene of the law.)This matter will be treated privatly with absolute confidentiality as well as upmost sincerity. I look forward to your quick reply.
Best Regards,
Barrister Chandra Sekharan
(Principal Attorney)
This message was sent by: Chand Sekharan & Associates, No. 62, Jalan Perak,Taman Kolam Air, 80200 Johor Bahru. Malaysia, Taman Kolam Air, Johor Bahru 56000
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