On the 26^th January 2011 Barclays announced that it was closing its financial planning arm.  The announcement came in the wake of a £7.7M fine imposed on it by the Financial Services Authority. Subsequent compensation claims for upheld complaints could rise to £60M.

In light of this it comes as no surprise that Barclays is top of the premier league of most complained about financial institutions during the second half of 2010.

As if that wasn’t enough Barclays was told by the FSA to tighten up its interpretation of when a complaint is closed. As a result Barclays has re-stated its complaint figures for the first half of 2010, adding an additional 48,356 complaints to the originally published figure of 259,266.  The total number of complaints received by Barclays in the first 6 months of 2010 now stands at 307,622.

The total complains received by Barclays in 2010 is a staggering 602,513 – more than a third of 1.79M complaints received by the banking sector.

These results come as no surprise to me. The banks are nothing more than massive sales organisations. Their sales staff are rewarded for selling products. When an organisation’s employees are incentivised to sell products it is inevitable that some customers will be sold inappropriate products. The “adviser” may well be tempted put their sales targets before the best interests of the customer.

This temptation simply doesn’t exist in a true financial planning practice like Proposito. We are paid a fee by our clients for our advice & recommendations. We have completely dissociated advice and product sales.  If the advice is to purchase one or more products to enable the financial planning objectives then we charge a separate (and modest) fee.