France: AMF Sends Mystery Shoppers to Banks, Uncovers Shortcomings for Savers

The French Autorité des Marché Financier (AMF) has launched a “mystery shopper” campaign to gain first-hand experience as to how banks are treating their customers. What the regulator uncovered clearly fell short of what old banks should be doing.

The AMF notes that it has conducted mystery shopping campaigns since 2010 – for both in-person and online experiences. The project is coordinated by the European Securities and Markets Authority (ESMA), in which ten other regulators participated, focused more specifically on the costs and charges of financial products.

This most recent campaign was conducted last year – from June to October and entailed 210 “mystery visits” to 11 of the major retail banks.

The erstwhile customer was one of two examples. A high-income, less risk-averse individual as well as an investor hoping to shoulder less risk. Each individual was aged “around 40” and was seeking investment advice for €50,000, with “the aim of increasing the value of his/her savings over a ten-year period, in preparation for retirement.”

According to the AMF, the main findings of  the mystery shopper survey include:

  • Although some progress has been made, there are not enough questions about the client’s knowledge and experience (about 6 out of 10 cases);
  • The question about risk tolerance is asked only in half the cases;
  • Communication regarding the benefits and drawbacks of the products and tax wrappers is not always balanced;
  • Information about fees is presented in just over half of cases and is often fragmented;
  • The suitability report that the advisor should systematically provide to the investor was only provided in 8% of cases to risk-lovers and 11% to risk-averse clients;
  • Sustainability preferences are starting to be mentioned, in a rather general way, given that the obligation to ask questions in this area came into force during the campaign.

The AMF noted that most of the institutions visited have “generally improved the way they take MiFID II obligations into account when questioning the client, in particular about the client’s financial situation and ability to bear losses.”

Obviously, the banks can do better.


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