Daily Market Update

RTE Primetime: Financial ‘Advice’ Exposed

Following the Thursday night RTE documentary on Irish Financial Advisers, Gold Investments’ Wealth Management Division, Wealth N, would like to issue the following statement: –

The misleading, unethical and disturbing financial ‘advice’ seen in last night’s excellent Primetime programme may only be the tip of the iceberg and we call upon the Financial Regulator to become more proactive in protecting investors, young and old alike, from the predatory, dishonest commission driven financial advice being offered by some in the financial services industry. We call upon other firms in financial services to encourage the regulator in this regard.

The reality of vulnerable senior citizens and their hard earned life savings being exploited by at best amoral and clearly unethical elements in the financial services industry in Ireland should be acknowledged and steps taken to ensure these practices are stamped out once and for all.

Wealth N believes these steps should include

– The Financial Regulator needs to be far more robust in their dealings with all investment providers in Ireland.

The programme showed multiple examples of advisers leading a client towards a particular product before a fact find had been completed. The regulator should investigate the extent to which fact finding is being conducted as a “rubber stamp exercise” after a specific product has already been “sold” to a potential client as was in evidence in the Primetime programme.

-Greater understanding of risk and investment diversification is essential and must be insisted upon by the Financial Regulator.

Diversification should be encouraged in terms of products, geographical exposure and to a range of different asset classes. In Ireland, there is an unhealthy obsession with property and more recently equities (particularly Irish property and equities) which is very dangerous particularly given the many growing challenges facing the Irish and global economy.

The fundamental tenet of investment theory is to be properly diversified and “not to have all the eggs in one basket”. Unfortunately, this fundamental tenet is paid lip service to or seemingly ignored by some in the Irish financial services industry.

-The regulator should issue a code of conduct specifically for dealing with the elderly and vulnerable in Society

There are no rules or even guidelines as to how companies should treat the elderly. In the UK, The Financial Services Authority (FSA), which oversees every financial company, says it would be likely to jump harder on companies seen to be mistreating vulnerable customers. The FSA’s own research shows that more than half the over-65s do not trust financial advisers, compared with a third of people under 30.

-The regulator should make a clear distinction between fee and commission based advice

Real independent financial advice can only be properly achieved in reality by getting proper fee based wealth advice. The UK financial industry faced similar issues and has in recent years increasingly adopted the fee based model.

Commissions create a fundamental conflict of interest. Young and middle aged QFAs on low basic salaries are under pressure to sell products in order to get essential commissions to pay costly bills and high mortgages.


As Eddie Hobbs correctly pointed out – these vulnerable senior citizens are the people whose hard work and many sacrifices helped create the Celtic Tiger and they do not deserve such shoddy treatment. Their hard earned savings should not be recklessly, negligently and in some cases deliberately exploited by those entrusted by our society to protect and preserve their livelihoods. All Irish citizens should not have their hard earned savings exposed and endangered by the unethical practices of some in the Irish investment industry.

Note for editors and journalists:

For informed comment on the future of finance and investments in Ireland, please contact head of Wealth N Mr Marc Westlake (Dip PFS, QFA) Qualified Financial Adviser UK & Ireland, Member of the Personal Finance Society, The Chartered Insurance Institute, and Life Insurance Association (Ireland). Marc can be contacted on 01 632 5010 and marc.westlake@gold.ie or Mr Daniel Stokes (llb MA, QFA) client executive daniel.stokes@gold.ie

Mark OByrne


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