More than 80 per cent of bank and building society financial advisers in a Which? investigation failed to give good financial advice.
Our undercover researchers caught them giving misleading information; almost half of the 25 tied advisers led researchers to believe they offered more choice than they did offer.
Most advisers working for big banks are ‘tied’, which means they can only recommend their own products or, at best, products from a very limited choice of providers.
A Bradford & Bingley adviser selling income protection insurance said the building society was free to choose whose products it used.
However, it’s tied to Legal & General for protection products and, unsurprisingly, it was one of these products that the adviser recommended.
An adviser at HSBC, also selling income protection cover, said the bank had an agreement with different insurance companies, but that he’d recommend an HSBC policy.
In fact, for this type of policy the HSBC cover is the only one it would ever recommend.
As part of the investigation, Which? money experts visited 57 financial advisers in England and Wales – 25 tied and 32 independent.
They included advisers working for Abbey, Barclays, Bradford & Bingley, Halifax, HSBC, Lloyds TSB, NatWest, Nationwide, Royal Bank of Scotland and Yorkshire Bank.
We checked whether they followed rules, how clearly they explained everything and whether they recommended the right type of product or solution.
Independent financial advisers (IFAs) did perform better but less than half of those visited passed all our benchmarks for good advice.
Which? Editor Neil Fowler said: ‘Which? has been testing financial advisers for more than 20 years and our results have been consistent. Our latest investigation leads us to believe that the industry has failed consumers in the provision of this crucial service, and is still failing them.
‘Consumers are caught between a rock and hard place, though. Most of us need help with more complex financial decisions so whether we love them or hate them, we can’t do without advisers. There are some good advisers out there but they take a bit of finding.’
To get the best advice, Which? recommends avoiding the high street. People should stick with advisers who are fully independent, contacting at least three to try to find one that specialises in the type of financial advice needed.
Anyone needing financial advice should also consider paying by fees instead of by commission and be prepared to negotiate costs with the adviser. Which? gives information about how to find an adviser.