Advisers fall at first hurdle

Just 32 per cent of tied advisers, most of whom work for high street banks or building societies, passed with flying colours.

Independent financial advisers (IFAs), who can recommend products from the whole market, fared better with an overall pass rate of 48 per cent.

Seven of the tied advisers made misleading statements about the providers they could recommend, giving the idea that the choice was much larger than it was. Thirteen advisers made misleading statements about costs.

Fact finding about the individual, their circumstances and their financial needs is a vital part of the advice process, but fourteen advisers failed to carry this out to the expected standard. More than a quarter failed to establish attitude to risk correctly.

Which? was disappointed that, based on the scenario presented to them, half of the advisers didn’t recommend paying off debts before investing.

Which? is the only consumer organisation to test the quality of financial advice in this way and has been reporting on it for over 20 years.The pass rate has improved slightly since 2006, when 34 per cent of IFAs and just 16 per cent of tied advisers passed overall.

Neil Fowler, editor, Which? magazine, said: “For more complex financial products such as investments, mortgages and pensions you really should see an adviser unless you’re confident that you understand the market, but with a shocking number failing our test it’s clear that you need to choose very carefully.

“On the whole you’ll get better advice from an independent financial adviser, as you’ll have more choice – but be clear about the advice you need, contact at least three advisers and check their qualifications and charges up front. That way you stand a better chance of getting the good quality advice that is so vital for financial decisions.”