Bad advice?

earlgrey_3

domino1953 wrote: »

The other serious error is saying that RBS adviors receive comission - they absolutely do not!

Thanks for that information. Does that mean at RBS they simply get a straight annual salary package and no other form of incentive for sales such a bonus? Sounds unusual otherwise.

A little on the FSAs attempts to clamp down on the problem of commission bias http://www.thisismoney.co.uk/investing/article.html?in_article_id=458474&in_page_id=166

However Peter Hicks head of IFA Channel at Fidelity International has said: "If Customer Agreed Remuneration (CAR) - which looks like commission by another name - can be defined as a fee then it is purely a change of name, not of practice."

domino1953 wrote: »

Not being party to the discussion its impossible to judge why this product was sold, but like all things equity related, just because the value has falen, doesn't mean it won't rise again.

Quite so, or equally fall even further. Witness Japanese equities. Prices never recovered and are still 78% lower than they were 19 years ago. The FTSE needs to rise by 50% to get back to the levels of Xmas 1999. We are where we are and would be a very brave man who predicts when prices will return to those of a year ago. A 70 year old has less time to wait. More importantly, will their eventual rate of return have been better or substantially worse than cash.

willt

The advisor (or salesman as they should be called) will certainly have to have issued a suitability letter / reasons why letter but that doesn't necessarily cover them entirely. They could still have a case to answer if the product was obviously unsuitable for the client. Advisors are pretty scared of complaints being escalated so kicking up a fuss might get you somewhere, make it clear that you will go to the ombudsman if not happy.

As to whether RBS advisors are paid commission, to say they are not is as close to a lie as you can get without lieing. They receive a bonus based on the number / value of products they sell that attract fees (ie S&S ISA's, pensions, etc). It may not be a true commissionas an IFA will charge, but they still benefit financially from the sales. I used to work for RBS and HBOS and we used to tell the same BS to our clients "I don't get commission", whilst working out our "bonus" based on the sale. Needless to say I don't work for wither now.