In the last four to five years, there have been constant reports in the media – radio, newspapers, and TVs included – of PPI scandals. The news, however, centers around mis-sold financial products such as pensions and other investments along with companies that help victims get their money back.
With the increased reports of PPI scandal, a searchlight has been beamed into the mis-selling of financial products like never before. The reports however have been made popular since the financial recession and consumer trust in the financial industry is recorded at an all-time low.
With the increasing fall in consumer trust, consumers have increasingly sought to re-evaluate their past and present financial decisions with the aim to evaluate the risk and worth of their financial decisions. This increasing shift in the dynamics of the consumer thought process has caused consumers to increasingly review their financial planning.
The new age consumer is now interested in picking apart the nitty gritty and details of his or her financial investment; especially with the new regulations that have been brought on to ensure that consumers are treated fairly while limiting the bias suggestions from financial advisors who may seek to impose certain financial products on consumers due to high commissions that will be accrued to them.
Some of the leading financial experts are, however, more concerned that PPI mis-selling may just be the tip of the iceberg, in that, several clients may later find out that most of the financial institutions they have been dealing with have not been giving the actual correct information about packages to them.
With experts believing the number of affected persons to be in millions, it is important to understand why the experts believe the numbers to be so high.
High Commissions –
Before the introduction of the RDR, high commissions were available for the selling of certain products to clients thus making advisors and institutions using high pressure tactics to push clients into financial products that will earn them the highest commissions irrespective of how suitable the product is for them.
Trawling Data –
Financial institutions are able to access the true data giving them an insight of the details of each client’s finances, information which they end up using for their own gains. Companies have been known to use this information, especially of financially stable clients, to make sales push.
Poor Training –
Financial advisors may, due to poor training, pass across wrong messages to clients due to misinterpretation of the information let down by the management. The dissemination of the wrong message to clients may influence their decisions thus making them choose the less suitable financial package.
Risk Aversion –
Most often than not, clients make the wrong financial choices when some information, such as the risks associated with a particular product, is shielded from them. When clients fail to get the full financial risk or the advice they need, there is an increased chances that they may most likely make the wrong choices with regards to financial products such as pensions, investments and more.
However, should you feel like you’ve been a victim of any of the above or particularly have been mis-sold a pension plan, contact professionals at http://goodwinbarrett.co.uk/mis-sold-pensions/ for help.