Monday, October 22, 2012

Inducements: the problem continues

Finance Watch

If you were choosing an investment product, would you want the salesman to recommend what's best for you – or what's best for them?

 On 26 September 2012, the European Parliament voted to drop a proposed ban on so-called "inducements" paid to financial advisors. "Inducements" are payments that banks make to financial advisors for recommending one product over another. They work something like this:

These payments put the interests of financial advisors in direct conflict with the interests of their customers. Some Member States* have already decided to ban them but in others, consumers are still unprotected.

Finance Watch is urging EU policymakers to protect all European consumers – and in the long-run providers too – from the potentially dramatic consequences of miss-selling investment products.

If you want to know more about the European Parliament's vote on the EU directive and regulation on markets in financial instruments called MiFID2, please have a look on Finance Watch website

*The UK, Netherlands and Denmark have bans or restrictions on inducements in place or planned from 2013. The UK ban follows a period in which British banks face billions of pounds in compensation claims after miss-selling payment protection insurance and interest rate swaps to consumers and small businesses.

Sunday, October 7, 2012

Businesses 'lack trust' in banks

bbc,  BBC News Business

Businesses' trust in banks and other financial institutions is falling.

Read the Article