Financial advisers avoid asking clients the tough questions - survey
A new survey has shown that 25% of financial advisers avoid asking their clients important questions about their investment goals, but instead prefer to concentrate on trival matters.
The research conducted by myprivatebanking.com, a information portal on wealth management, showed a quarter of the 20 European private banks polled did not ask any relevant questions about appetite towards risk with a test client.
More than half the banks surveyed presented an investment proposal that did not adequately take the client's risk appetite into account.
In 25% of cases the proposed investment was completely opposite of the client's preferences, said the survey.
One third of the banks had fee structures that included a significant amount of hidden costs, through a large number of managed funds and in-house products.
Nevertheless, some banks in the survey came out better than others. Scandinavian bank Nordea scored the most points in the client survey because of its good client mapping and an investment proposal that showed the bank had understood the needs of the client fully.
German private bank Sal Oppenheim ranked second, offering a very cost efficient proposal.
Swiss bank UBS also showed a particularly high level of professionalism in its interactions with clients.
Christian Nolterieke, managing director of MyPrivateBanking.com, said: “We were surprised by the high percentage of banks that did not address the investment goals of the client adequately and just recommended their off-the-shelf proposals."
He added: "Banks should be more transparent, so that clients know about hidden costs that often can be as high as the stated direct fees”.
On average, all surveyed banks attained 52 of a total of 100 possible points.
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