Most financial advisers cannot be trusted to sell the right protection products along with mortgages says the CA today following a year-long undercover investigation.
Posing as first time buyers, the Consumers Association’s operatives found that just one out of 39 advisers approached about protection needs received the appropriate advice.
Only a third of those approached actually bothered to calculate how much the client(s) could afford in premiums, while the majority recommended cover that was not needed, the CA says.
In addition, few advisers explained what was covered by the critical illness or income protection plans they were recommending.
Two advisers resorted to telling stories of cases of cancers affecting their own families or friends in order to stress the need for cover, the CA adds.
Findings lend support to the FSA’s moves to more tightly regulate sales of insurance products, the CA says, but it fears the new insurance regime will not go far enough in regulating sales of CI and IP cover.
The association concludes the FSA must start doing its own “mystery shopping” in order to identify and fine those companies breaking the rules.
The Consumers' Association recommends on page two of the report in cases where the client is not sure of its insurance cover, they should "consult an independent financial adviser".IFAonline
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