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LucyGransnet (GNHQ) Thu 15-May-14 11:43:45

Money: don't join the "banana skin and grave brigade"

David Craig describes the underhand tactics of financial salespeople when approaching older customers, and the dangers of not talking about money with elderly relatives.

David Craig

Money: don't join the "grave brigade"

Posted on: Thu 15-May-14 11:43:45


Lead photo

The salespeople that prey on elderly and vulnerable customers

Of all the horrors I found working in the financial services industry, the one that probably shocked me the most was how people in financial services treat those approaching or above retirement age. Financial services salespeople often call those close to retirement or already retired "the banana skin and grave brigade" because they have one foot on a financial banana skin, as they don't know much about savings and investments, and the other in the grave as they'll presumably soon be going on to a better place where they won't be needing their money any more.

I once even saw two supposed "financial advisers" (actually salespeople) working for a high street bank laughing and joking over the case of a pensioner who had lost about half his life savings, more than £100,000, because the pensioner placed the money in one fund the salesperson had recommended as being "safe" when in fact it put savers' money into extremely high risk and disastrous investments.

Many financial sellers specialise in the lucrative market of selling to retirees and those planning their retirement. They can have titles like "senior wealth advisers", "retirement planning advisers", "elder planning specialists" or even the rather scientific-sounding "financial gerontologist". Typically these sellers use what sales trainers call FaG selling (Fear and Greed) - they exploit older people's fear of living longer than their money lasts and their greed when offered seemingly attractive opportunities to increase their savings.

We need to overcome our reticence, ask our elderly friends and relatives about their money, find out who is chasing them to get hold of their cash

One set of dubious products typically sold and mis-sold to banana-skin-and-gravers are longer-term (five or more years) stock market investments with punitive penalties for early withdrawal. One company even specialised in selling these to people already in care homes. Naturally, quite a few customers died before their investments matured and their heirs found that, after deduction of early-withdrawal penalties, the investment companies returned considerably less than had been invested.

If older people don't have much ready cash available, that hasn't deterred eager financial sellers. Although some over 65s may have limited pensions and savings, many own their own homes making them what's called asset-rich but cash-poor. Seeing the potential of the asset-rich cash-poor market, financial firms have devised various schemes, often called "equity release", which promise to free up some or all of the value in their customers’ homes allowing them to live more comfortably until they die in return for the firms taking part or whole ownership of their customers' properties.

Interest rates on these equity release loans tend to be quite high – close to six or even seven per cent. So, thanks to the wonders of compound interest, sums that appear quite modest when originally borrowed can turn into massive debts. For example, someone aged sixty five borrowing the average equity release loan of £53,000 against a home worth £200,000 would find their debt had shot up to about £100,000 after ten years and £200,000 – the total value of their home – by the time they hit eighty five.

In Britain we're often uncomfortable talking about money with our parents and elderly relatives. We feel it might look like we're on a fishing expedition trying to find out how much we might get from them. But if we want to prevent those we know joining the "banana skin and grave brigade" we need to overcome our reticence, ask our elderly friends and relatives about their money, find out who is chasing them to get hold of their cash and warn them about the dangers of handing over their savings to commission-hungry salespeople.

David Craig is the author of Don't Buy It! Tricks and Traps Salespeople use and How to Beat Them (Thistle Publishing) which is available from Amazon.

By David Craig

Twitter: @Gransnet

papaoscar Thu 15-May-14 13:14:29

Good advice. Everybody should be aware of the predatory conduct of some sellers of financial products. We old'uns are particularly vulnerable. Sadly, the large financial institutions are often no better than some of the independent advisors. Best advice I've heard - if it looks and sounds to good, don't touch it. And don't hesitate to tell the advisor to xxxx off, its your money after all!

Mishap Thu 15-May-14 16:33:44

As I have posted here before, my Dad (then 85, now dead) was (at the point when my mum died) sold some ridiculous "product" by Lloyds which did not bear fruit for 2 years and incurred an annual fee. It was inappropriate and disgraceful - the only reason we did not complain was because we did not want him to feel like an idiot.

HollyDaze Thu 15-May-14 17:16:50

The article could have been more helpful by giving some positive advice on where older people can place their money which isn't at such high risk.

papaoscar Thu 15-May-14 17:48:46

National Savings & Investments, HD, tho' their interest rates are poor and more and more of their stuff is on-line, but at least its safe (I hope!) I think they have a new higher-interest Pensioner's Bond starting at the end of the year.

janeainsworth Thu 15-May-14 18:10:20

I agree holly.
The blog certainly hasn't tempted me to buy the book!
I think the next best advice, after papaoscars, is never buy a financial product you don't completely understand, and only deal with a qualified financial planner or advisor.

jinglbellsfrocks Thu 15-May-14 18:54:45

Having looked on Amazon I think the blog is misleading! The book seems to cover a lot more than elderly people and their money. It's about all kinds of sales people and their selling techniques. Sounds a good read actually! shockgrin

jinglbellsfrocks Thu 15-May-14 18:56:33

From a customer's review on Amazon:

"Even if you are just about to change your car at a main dealer you need to read the chapter on car buying to learn the dealer's tricks awaiting you."

What has that to do with financial investments?! confused

Ana Thu 15-May-14 18:57:22

Surely a car is a financial investment, jingl? confused

jinglbellsfrocks Thu 15-May-14 19:05:33

Yes. It is. Sort of. hmm

Not a money in an account sort of thing though. hmm

jinglbellsfrocks Thu 15-May-14 19:06:16

I don't think ther book is aimed particularly at older people. Not if the reviews are anything to go by.

Ana Thu 15-May-14 19:06:22

Obviously not...hmm

janeainsworth Thu 15-May-14 20:12:52

Ana a car purchase is the sort of investment where you can be sure that the value of your investment will go down, and you definitely won't get any income from it, unless you're a taxi driver!

Ana Thu 15-May-14 20:18:22

Well, all right then...I stand corrected! A car is still a big 'investment' to some people though, and still a bit of a gamble! grin

HollyDaze Thu 15-May-14 20:28:31


I recently met with an advisor at my bank regarding investments and the best deal they could offer returned a whopping £25 per year hmm

There has been a suggestion about Government bonds but I'm not sure I trust the government with money given the pension fund.

I had forgotten about National Savings though so I shall look into that. Many thanks for the suggestions.

HollyDaze Thu 15-May-14 20:32:01


After meeting with my bank, I wasn't taken with anything (why would I tie up my money for a measly £25pa?). I now feel concerned as the chap then said, and I'm sure he used this term (which appears in the article), 'senior wealth advisers' - I thought it meant senior as in a senior position!

janeainsworth Thu 15-May-14 20:37:45

Holly I think anyone who works in a bank will only recommend their own products. I agree it's not worth having your money tied up for 25GBP a year!

annsixty Thu 15-May-14 20:50:31

I was told recently at my bank that advice is no longer given on Investments.They will tell you what is available and interest rates etc but advice has to be paid for.I didn't query this it was just in a conversation.

HollyDaze Thu 15-May-14 20:51:32

janeainsworth shockingly low return isn't it. A tax advisor mentioned the government bonds but our lot have spent most of the pension fund hence my nervousness in letting them get their hands on my meagre amount of money! And, I forgot to mention, if money is taken out without three months notice, I would have incurred a penalty! All very worrying when you don't understand any of it sad

Valbeasixties Fri 16-May-14 12:49:23

On a different note.......
My mum had Parkinsons Disease with dementia but was able to live at home with support. One evening when I went to visit her to put her to bed, I noticed a document which she had signed that day on her table regarding replacement windows on the ground floor of her cottage. The cost was incredibly high as no 'negotiation' had taken place. Sadly, we knew that mum's time living by herself at home was limited and in fact she moved into a nursing home 6 months later. I telephoned the 'very well known' double glazing company to explain the situation and express how saddened I was as it would have been very obvious to the sales person that my mother had dementia and was unable to make decisions independently. Reluctantly they agreed to annul the agreement but were surprised by my suggestion that taking account of vulnerable people when cold calling should be part of their training programme.

Nanaonthego Fri 30-May-14 23:56:34

What can we do with the little money we have hidden away? Where is the best place/advisors to go to where we won't be taken advantage of?

FlicketyB Sat 31-May-14 15:46:57

Valbeasixties if your mother has dementia any contract she signs with anyone is automatically nul and void as she does not have the mental capacity to act for herself.

It is worth remembering this as these salesman often rely on conning people, of all ages, with any sort of mental problem into signing contracts knowing that family and friends will often not seek advice when faced with this problem and can be coerced into helping the vulnerable person to fulfil it.

I resent the whole tone of this blog and its suggestion that because we are over-retirement age we are all fiscally incompetent. When we were as young as the author there were 100,000s of people of our then age working as accountants, bankers, book keepers and in a whole range of other financial savvy jobs. We do not suddenly lose that savvyness when we retire.

Being tempted to invest in get rich quick/get high income schemes is not particular to older people. It is just that elderly people make a good sob story in the papers when we do, because papers believe that if older people make bad investment decisions it is because their age automatically makes them gullible and therefore good for a sob story - and that I find insulting. Read the financial pages of any popular newspaper and it is full of stories of people of all ages who have made blinding obviously bad financial decisions and then get all upset when it all goes wrong.

I have no qualifications as a financial advisor but I suggest the following rules for the many who do not understand or think they do not understand finance.

1) Never a buy a financial 'product'. The moment your advisor mentions the word product, gather up your savings and run for the door

2) If you do not understand what is being offered, do not buy it. Insist on taking the paperwork home and reading it carefully, with a magnifying glass if necessary. If you are not absolutely clear about what you are being sold do not buy it. It may be ideal, but you can not be sure unless you understand the paperwork. (This is known in our family as 'Helen's Law' after my daughter who propounded it after getting her fingers burnt financially)

3) If your funds are limited the safest way to guard them is to put them in a savings account in a bank or building society or buy savings bonds for periods of years. Yes, the interest is lower, but your capital is as safe as it can be. Look online or in the financial pages of the papers at weekends. They will list interest rates on different accounts with different savings institute and you can often get a higher rate by moving to a different Building Society or bank

4) Take responsibility for your financial decisions. All the popular papers have financial sections. Read them. Do not sit down and try and read them from cover to cover, but start by scanning the headlines, read the 'readers questions and answers section and learn by others mistakes. Try reading the comparative interest rate tables at the end of each section, gradually you will increase your understanding and begin to read more. None of us is safe from a really clever fraudster, but forewarned is forearmed and with some financial knowledge, you are better able to make your own decisions and not be cheated by a smart salesman.

5) Never buy anything from a cold caller, especially a cold caller who rings you at home. Don't be lured into conversation. Just put the phone down

5) Do not be greedy, like love and marriage, high returns and high risk go together.

rosesarered Sat 31-May-14 16:34:37

Good advice from FlicketyB[ she pays me a small fee for that.]grin

rosesarered Sat 31-May-14 16:36:03

The 123 account from Santander [currant account] seems to be the best [safe] thing around.

FlicketyB Sat 31-May-14 17:00:13

rosesarered grin