Advice offered by high street mortgage lenders and estate agents could be "very dangerous" as it usually only gives simplistic universal solutions, says LifeSearch.
The protection specialist's warning is made in response to a report published yesterday by the Consumers' Association, suggesting poor advice and dubious sales tactics are widespread in financial advice.
At the same time, however, 'mystery shoppers' from the CA looked only at advice delivered by tied agents of banks, building societies and estate agents, rather than IFAs.
Agreeing with parts of the report, LifeSearch warns advice which offers consumers simple and blanket statements which recommend one type of solution can be very dangerous. This is because each individual’s circumstances are different from one another, the firm says.
That said, there are several technical "flaws" within the report, says Carr, Lifesearch does not agree with.
Which? suggests, for example, life cover should not be sold with criticall illness, when life cover is issued free with CI.
Similarly, Which? seemed to suggest the only product which should have been offered was income protection, says Carr, when several of those banks and buildig societies 'mystery shopped' do not offer their own income protection product and could therefore not be criticised for failing to offer "the right product".
Backing IFAs, LifeSearch believes consumers should only rely on expert independent advice when choosing a protection product.
LifeSearch senior technical adviser, Kevin Carr, says: "It is vital that advisers fully understand their client’s situation, explaining the strengths and weaknesses of the products available.
"LifeSearch has actively been raising awareness of the need for independent protection advice for many years and although we do not agree with some of the technical content of the report, we are pleased that this report demonstrates that the High Street is not the best place to buy life insurance, critical illness or income protection," he adds.
Tom Baigrie, LifeSearch managing director, says: "Protection is not as simple as many people still believe. Anyone buying it without specialist advice can make mistakes. LifeSearch is 100% independent and specialises purely in the area of protection.
"It is also vital that in protecting consumers from bad advice, commentators take care not to lead consumers into distrustful apathy as seems to have happened in the pensions market. In truth, consumers can be confident that open and honest independent advice is still widely and easily available," he concludes.IFAonline
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