It seems that scandals are endemic in the UK’s financial system at the moment.  They’re no longer the preserve of the banks either.

Earlier this week BBC’s Panorama programme exposed what financial planners have known for a while:

• Banks sell products
• Banks are massive sales organisations
• Banking “advisers” are rewarded with commission and bonuses for selling products
• Banks are not neccessarily trustworthy

Chancellor George Osborne will today announce plans for retail banking to be “ring fenced” from their more profitable (and risky) investment banking arm.  This means that in the event of another “credit crunch” the investment banking operations will be allowed to fail, whilst the public’s current accounts remain intact.

Good news for the banks though (in the form of bad news for someone else) is that there is a new kid on the block.  The beleaguered financial services sector is about to come under the FSA spotlight once again – this time it is private wealth managers. There is an irony here that isn’t wasted on me.  The private wealth managers who now find themselves in the FSA spotlight will include the private client divisions of…yes you’ve guessed it….the banks!

In a letter published today, the FSA has written to 260 memebers of the wealth management industry with findings from a recent sample review.  It has found evidence of “significant, widespread failings”.

• In the sample over 87% of firms were judged to “pose a high or medium-high risk of detriment to their customers”.
• Only 21% of the files reviewed were able to satisfactorily demonstrate suitability.
• Two thirds of the cases reviewed were not consistent with the firm’s inhouse models, the clients’ attitude to risk or the clients’ objectives.

Scary stuff. The FSA believe their findings might extend across all wealth managers – hence the FSA action.

It doesn’t really matter if it is a bank or a wealth manager: the source of the problem is the same. The organisation is far more concerned with simply making money out of the client rather than understanding their clients’ needs and providing a valuable service.

All businesses are looking to turn a profit. However financial planning is also about providing a professional high quality service. If the focus is solely on financial gain then the value add for the client is at risk.

At Proposito Financial Planning we help clients make smart decisions about their money.  This includes protecting their wealth from organisations and individuals motivated by sales targets.

We work closely with each person to enable them to achieve their financial goals.  We take the time to understand their unique financial situation and through thorough fact finding and risk tolerance discussions, in addition to annual review meetings we can be sure that we truely ‘know’ and appreciate their individual circumstances.
This then enables us to develop and present them with a financial plan tailored to their short, medium and long term requirements.

And because we take the time to know and understand each of our clients, as well as communicate with them on a regular basis, we can be sure that we can act promptly if their circumstances change.