/ Money

Avoid financial advisers who don’t meet the ‘standard’

Many people simply don’t know who to trust when it comes to financial advice. With over 24,000 independent financial advisers in the UK, would a new British Standard give you more confidence to choose?

On the Which? Money Helpline, we often see the outcome of poor financial advice, whether it’s someone calling us to discuss a mis-sold pension, inappropriate investments or other unsuitable financial products.

Sadly, this comes as little surprise to us. Our mystery shops have repeatedly found the quality of financial advice on offer to be incredibly sub-standard; particularly from high street banks and building societies.

Don’t lower your standards

On past conversations, we’ve heard from people who have struggled with unhelpful advisers. Naima told us:

‘I need to reincarnate 10 times to get over the grief of trusting the bank financial advisers.’

While Annie D said:

‘I moved everything over to a private financial advisor, who told me that one investment policy sold to me by the banks was notoriously awful, and they’d never choose it. So why did the bank? Commission.’

To try and make the search for advice more straightforward, Which? and other industry experts have been involved in developing a new British Standard for Financial Planning and Advice Services. Launched in May 2012, this standard sets a framework for the management and delivery of financial advice and financial planning services.

To meet the standard, firms will have to meet nine core principles, which have been designed to improve the management of their business and to protect the interests of their customers.

Choose with confidence

So, if you opt for a firm that has the British Standard, it gives you the assurance that the adviser you’ve chosen meets a high benchmark. As a result, they should provide you with a high-quality, reliable service.

Have you had any bad experiences with unreliable financial advisers? Will you look out for the new British Standard when you choose your next adviser?

Justin King says:
6 June 2012

Here at MFP Wealth Management we have been looking forward to benchmarking ourselves against this new standard. We have our assesment booked in for the earliest date available in October and hope to be one of the first firms in the UK to receive a British Standard. I hope it will provide consumers a much needed quality reference point for financial planning firms.

Adrian Kidd says:
8 June 2012

Whilst I encourage anything to improve my profession, another new kitemark will not prevent bad experiences for the public. There should be many questions people ask before they engage the services of an IFA to make sure the “fit” is as good as it can be for them. I have always found that knowledge, open and honest conversations and sharing good and bad news quickly helps develop relationships and relationships are what is required in this business.

Adrian Kidd
MKC Wealth

TrEvOr says:
10 June 2012

I’m afraid I will only get full confidence in advisors if they only took their commission if sufficient profit / management fees had been made by their recommended investments over that financial year (ongoing). Then there may be sufficient impetus to truly seek out best advice. My apologies to the good advisors who do this already.

Adrian Kidd says:
11 June 2012

Your points are valid Trevor, the hedge fund industry charges performance fees but also gets paid when they lose money which is what I think you are intimating toward.
There are many good advisers out there and the financial advice industry is plagued with the same issues that others have – there are good, bad and average in all walks of life.

Adrian Kidd

As I consider all institutions involved with money as essentially corrupt I might consider opinions from Which or Martin’s Money Tips. ‘ Once-bitten’ should be my middle name……

Bill.i.am says:
24 October 2012

Labelling all financial institutions as corrupt is pathetic. It would be like labelling all plumbers as slapdash just because one failed to fix a leaky washer on your neighbour’s wash basin. You acn’t tar everyone with the same brush

Whilst your money is decreasing in value under your mattress any sane person would seek advice from an IFA or stockbroker.

Bill.i.am says:
24 October 2012

Trevor, your point is invalid. Every single person is different, every firm is different, every company, fund, share-class is different. To make a profit on every single product is impossible. Besides, how do you make profit on a “Whole of Life” policy which gives a large sum assured for a small premium?

People always think they know best when it comes to investments/pensions/protection, but you are very very wrong as your family will find out when you die and leave them with a massive IHT bill. Spending £3,000.00 to save a £50,000.00 IHT bill seems like a good idea to me.

Justin King says:
25 October 2012

I am pleased to report that MFP Wealth Management have become the first firm in the UK to achieve BS 8577, the new British Standard that Rebecca refers to above. It was a rigorous assessment of our firm’s practices.

I was also personally assessed to ISO 2222 which is the international benchmark that assesses that financial planners can demonstrate that they have the knowledge, skills, experience and ethical values to deliver a first class service to their clients.

Anyone looking for advice can now add these accreditations to the checks that they make on a firm and adviser before engaging with them.

Adrian Kidd says:
25 October 2012

If, during a first conceptual meeting the adviser / firm does not discuss how it gets paid and what it would charge, this should allow the alarm bells to go off. It is all about if you like the adviser (and they like you) and do you get the feeling they are being straight and upfront with you (real trust comes later). Ask about experience, qualifications and other things that are valid and then decide to engage or not engage their services. One place you will not get this would be your bank, where advice is still banded around as free. Even the Money Advice Service claims to be free, but paid for by IFA’s.