The consumer association recently conducted an undercover investigation into the suitability of investment advice provided by high street bank and building societies. In total 37 advisers were tested on their investment advice, only 5 were found to have given good advice.
The researchers who carried out the investigation were all over the age of 60 and were inexperienced investors. That didn’t stop 17 advisers recommending investment bonds that had high exit fees, in some instances as high as 12% if you wanted to access your money in the first 5 years.
Of the 37 advisers, 18 claimed that the advice was free. Even though they were being paid commission which had been deducted from the investment. A Yorkshire Bank adviser failed to disclose the commission that was being paid on a £50,000 investment even though it was £4,400 equivalent to 8.8% of the investment.
Of the three visits made to HSBC, two advisers did well but on the third visit the adviser provided one of the worst instances of advice. The researcher expressed on 4 occasions that they didn’t want to take on much risk, however 83% of the money was invested in a way that was above his risk tolerance.
When seeking investment advice always get independent financial advice, an independent financial adviser will be able to source solutions from the whole of the market and won’t be restricted to one company.
Investment advice is never free so always make sure that the charges are disclosed and explained to you.
