26 Jan Which? Investigation Claims Banks Mislead Savers with Risky Advice
A recent undercover investigation by Which? has apparently revealed that the majority of financial advisers in banks and building societies are providing bad information to the clients, leading to them making risky moves that would not otherwise be required.
The study concluded that only 5 out of the 37 advisers approached gave good advice about investments, with the majority apparently not understanding the risk associated with such investments, leading to them making misleading statements about said investments.
The investigation also found that many advisers recommended products that were inappropriate for customers. All of the mystery customers used in the report were inexperienced investors aged over 60. Almost half of the investment advisers recommended complicated and high-charging bonds, whilst four failed to mention charges related to withdrawing money during the first five years of investment.
Richard Lloyd, executive director of Which?, commented "Now, more than ever, consumers need advice they can trust on what to do with their money. It's shocking to see such low standards.
"We want the FSA's Retail Distribution Review (RDR) to force banks and building societies to be more upfront about the cost of their advice."
A spokesman for the British Bankers’ Association (BBA), countered, stating "Banks work very hard to ensure a high standard is common among their sales staff.
"Whilst tied advisers consider investments from a limited range they offer a competitive alternative to IFAs whilst being subject to the same suitability obligations."