First, have a look at recruitment. I was contracted to advise on insurance and pension schemes in 1990, after completing a simple form of 'character' test. This revealed me to be a potential high-flyer. All very gratifying.
It was only on the training course that I discovered that all the other trainees boasted the same high score. These people included former builders, double-glazing salesmen, a lady who used to install condom machines in men's loos and a flatulent ex-Marine who possessed all the financial acumen of a Chieftain tank.
Next, there's training. On my course, we were crammed with 'flip-chart and talk' style lectures for a solid nine hours a day. It was impossible to absorb all the information being spouted for that length of time. But the trainers didn't care a jot. Send your investigators in anonymously, and you'll find out why. I bet you find recruits using every cheating strategy ever invented by schoolboys, with the trainers turning noticeably blind eyes.
It could also be a good idea to carry out spot checks on the product knowledge of sales agents. I think you'll be appalled at the ignorance of most of them. I considered my own product knowledge to be abysmal, but it was above average for agents at my branch. I well remember my manager, who considered himself to be something of an investments guru, trying to sign up a woman for a pension scheme, although she had no form of income. In financial services terms, that is a howler of 'Battle of Hastings - 1944' proportions.
Above all, you must investigate the consequences of agents remunerated by 100 per cent commission payments. These simply motivate salespeople to use all sorts of tricks to make a sale.
Some point out the performance of pension funds in the neutral Money Management magazine; the client isn't told that the fund has been tracked over only a limited period. Others dazzle clients with guesstimates of a fund's performance over a fixed period, while keeping the official 'props' form - containing the figures the client should be considering - well in the background.
The truth is that if your mortgage depends on a client's commission, you are likely to use these strategies to secure a sale. I still feel guilty that for six months I advised on a subject as important as pensions when my knowledge of them was sketchy.
Now is the time, Mr Large, to clear the doorsteps of under-trained, sales-motivated 'financial advisers'.
(Photograph omitted)Reuse content