Investment advice in the test at financial test: Almost every 10th Bank poor

Wednesday, the 20.01.16 , written by Bernd Lauberg In the current test of the Stiftung Warentest for investment advice by banks (Finanztest 2/2016) only three out of 23 tested financial institutions can convince with the rating “good”. Two banks even fail with “poor”. However, those who want to recognize poor investment advice can protect themselves from making wrong decisions by preparing well.  This protects consumers from bad investment advice

Stiftung Warentest does not only check financial and investment products in the consumer magazine Finanztest. The quality of financial and investment advice, for example through banks, is also regularly examined. In a recent test, 23 private and cooperative banks and savings banks were scrutinized. The testers stated in the talks that they wanted to invest a sum of 45,000 euros flexibly over a period of ten years . In doing so, a medium risk should be striven for , on the one hand to enable a sufficient return and on the other hand to ensure enough security for the investor.

Current test winner of investment advice at Stiftung Warentest

The experts at Stiftung Warentest acknowledge that there is no silver bullet for investing but offer different solutions for the desired investment objective. However, to ensure the mix of security and return opportunities , the testers make it clear that they value valuation as “a well-balanced mix of secure fixed income or term deposits and riskier equity investments”. After all, six financial institutions receive the rating “good” in the category “solution to the investment problem”, which is 65 percent in the overall rating. Here, the test persons were proposed a distribution of their investment capital to several suitable products. Three of these financial institutions also achieve corresponding sub-grades in the categories “Determination of Customer Status”, “Product and Cost Information” and “Conversation Procedure”, which lead to an overall good quality rating.

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Poor investment advice: Too high risk, inappropriate and inflexible

The three test winners in the Investment Advisory Test 2016 compared two institutes that failed with one “poor” and five others only achieved a “sufficient” in the overall result. The reasons for the poor ratings are mainly in the selection of inappropriate products by the consultant. For example, some of the recommended investment solutions were too risky or access to the capital would not have been possible before the end of the ten-year investment horizon, as was the case. In addition, there were devaluations, because counseling protocols were not handed out, although this is required by law .

This allows consumers to protect themselves from poor investment advice

Especially as a layman, it is not easy to recognize an inappropriate investment recommendation. However, there are some ways to identify bad advice before, during or after a call.

1) In advance, it is advisable to record the exact investment wishes in writing . What is the investment capital? For what period should the money be invested? What is the personal need for security or risk-taking? If these questions need to be clarified during the actual conversation, there is less time for investment advice. Investors should be suspicious if an investment product is already proposed when making an appointment .

2) During the conversation, consumers should feel comfortable. This also includes discretion when dealing with such a sensitive topic as investing. A consultation between the door or on the spot or in the immediate hearing of other bank customers is therefore completely unsuitable. Also a consultant who directly tries to sell an investment product without knowing the individual financial situation and the investment wishes of the customer, will hardly find the right solution for their own needs. A detailed discussion with the opportunity to ask questions, however, points to a qualified advice.

3) After the interview, the customer should be given time to think . Then the given information and recommendations can be processed and, if necessary, uncertainties eliminated through consultation . In addition, the consumer then has the opportunity to seek a second opinion, especially if it has come to a problem in the consultation. In general, it is advisable not to let yourself be rushed to a degree or a signature – no matter how well the conversation went.

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