Independent financial advisers are better at giving advice than those tied to a bank or building society, research suggests.
The study by consumer magazine Which? found more than two thirds of tied advisers failed to pass all its benchmarks for giving good advice, compared with less than half of IFAs.
Which? researchers visited 21 IFAs and 19 advisers tied to various banks and building societies, including HSBC, Nationwide and Abbey, and asked for advice on how to invest £30,000.
The research found half of all advisers didn’t recommend paying off debts before investing, while 14 advisers tested failed to gather information about the clients needs to the expected standard.
More than a quarter failed to establish a correct attitude towards risk, according to Which?
Of the 19 tied advisers,13 made misleading statements about cost, while seven made misleading statements about the providers they could recommend.
However, Which? says the pass rate has improved since its last survey in 2006, when 34% of IFAs and 16% of tied advisers passed all benchmarks.
Neil Fowler, editor of Which? magazine, says consumers should seek the advice of an IFA, but says people should take care when choosing their adviser.
“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 of advisers failing our test it’s clear that you need to choose your adviser very carefully,” he adds.
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