Investment Joke

Q: What's one of the fastest ways to lose money?

A: Ask a bank for investment advice.


A client with a keen sense of humour recently got in touch to tell me about a conversation that took place recently between him and an investment adviser in the branch of one of the top 5 high street banks.

When discussing a lump sum of capital the adviser tried to sell an investment bond to my client, with one of the key features being that it would not have any initial charge. However the product illustration clearly showed it would pay initial commission of 7% to the bank.

Furthermore, it showed that if the investment was encashed within a year of being established, a 10% penalty would apply.

If my client had accepted the sales pitch and bought the investment, in real cash terms he would have immediately lost 10%.

It may seem like a radical idea, but shouldn't investments be designed to make you money, and NOT the financial adviser?

Ethical Investment in 8 March 2007 edition of Money Marketing

Hi John,

How interesting to read Chris Salih's article titled "Green piece" on page 36. The content was primarily negative talking about how an ethically screened universe of shares, removing many of the large caps, must lead to long-term underperformance.

Whilst I think informed opinion now recognises there is little or no difference in long-term performance, can I say that really this piece misses the point entirely.

It is for the customer to decide whether they want an ethically screened investment.

It is for the adviser to give the customer a satisfactory level of comprehension (financial capability) where the customer is able to decide whether they are prepared to accept any perceived potential investment underperformance (or outperformance going by 2006) or not.

Do financial advisers do this?

Or do they shy away from this whole area and instead tell the customer they don't sell ethically screened investments, because they are not on their panel etc etc

How does that stack up with treating customers fairly?

So let's go back to the results from the F&C survey, out of 2,193 people interviewed, 87% said companies should be taking social, ethical and environmental issues seriously.

Let us assume that is a hugely inflated figure, and really of those interviewed, only half will put their money where their mouth is. That is still a massive 43%.

How many financial advisers routinely ask their clients if they want social, ethical and environmental issues taken into account, and then arrange ethical investments in ALL cases where a positive response is received?

My guess would be 1% or less.

So I say again, how does that stack up with treating customers fairly? Not to mention you are missing an awesome new business opportunity dealing with all of that 'unmet demand'.

Kind regards,

Robin