MONEY COMMENT
Financial Advisers 'Can't Be Trusted'

By Jane Mack (TMFJane)
June 4, 2004

Oh dear. It looks as if financial advisers are getting some stick again after Which? magazine's researchers uncovered poor advice and questionable sales tactics during a year-long undercover investigation.

Posing as first-time buyers who were single, under 35 and with no children, they approached financial advisers working for banks, building societies and estate agents to test the advice given on insurance products sold with a mortgage. Overall, it was 'misleading and lacking in care' and would have resulted in people being under or over-insured, or buying unnecessary products they couldn't really afford.

Which? says that only one out of 39 advisers gave acceptable advice, asking enough questions and making the right recommendations. The rest either recommended life cover, critical illness or income protection products that weren't suitable, didn't explain how they worked or didn't ask the right questions to establish what insurance cover was really needed.

Some even used shock tactics to try and sell their policies with one adviser claiming his cousin had just developed breast cancer and another saying he was going to a funeral later that day for a 42-year old who had died of leukaemia.

Most of the advisers were tied to selling only their own company's products but they worked for some big names who should know better - Abbey, Barclays, Halifax, HSBC, Lloyds TSB, NatWest, Nationwide and Bradford & Bingley among them. The Financial Services Authority is due to tighten up their regulation of such selling practices but it looks like they've got their work cut out.

We've said it before and we'll say it again. If you need financial help go to an Independent Financial Adviser who charges a flat fee and who does not depend on commission to make a living. More importantly, educate yourself on money matters so you understand more about what you're being sold.

I've no doubt that there are some very experienced and decent commission-based advisers out there but, unfortunately, it's their own colleagues within the profession who are giving them a bad name.

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