News & Insights

Over a barrel

This sales practice seems prevalent with the banks here in Spain.  Every week I meet clients who have been forced to take out products with the banks to either avoid getting charged extortionate fees for transfers or to get an extra .5% interest on their account.  The worst of which I have seen this week which I will go into detail now:

This couple Mr and Mrs X had a bankers draft paid into their account from a house sale.  Of course the bank contacted them saying they needed to see them urgently.  Upon seeing ‘manager’ (or head of pressure sales I prefer to call him) they were told the entry of money into the account would cost them €600 and any future transfers out would also cost them similar amounts.  This charge could be miraculously waived should the couple take out 2 ‘qualifying’ products with them.  This is bad enough and in my opinion blackmail but these so-called qualifying products on closer inspection were the most frightening. 

The average age of this couple was 70 and the first ‘qualifying’ product was a savings plan investing €600 per annum minimum – it was hard to decipher other conditions but a savings plan for a couple that actually required to increase their income was in itself absurd.  The second ‘qualifying’ product was a €30,000 investment which was guaranteed not to lose capital.  On closer inspection this product was for an eight and a half year term and was invested in high risk stocks and the guarantee was only in place should they not make a withdrawal until the end of the eight and a half years.  This couple were unaware as all the information was in Spanish and this was not properly explained to them and they would definitely have needed access to this cash during this period

The most important rules when investing are first to make sure you understand every aspect of the product you are taking and secondly never feel pressured into buying anything.  At any sign of sales pressure run away – the salesman’s interest is not with you the customer but it is with himself either earning commission or hitting a target

In today’s financial climate it is essential you do everything you can to make sure your money is safe and secure and what you want to transpire in the future has the best chance of happening.

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Pension freedoms are being compromised

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