The variety of qualifications available to financial advisers must be simplified and better communicated to consumers if the industry is to succeed in increasing take-up of advice, Which? says.
In its ‘The Money Maze' RDR consumer report, it says it supports the move to raise standards of professionalism but argues it will fail to have the desired effect unless consumers can understand what qualifications mean.
Research conducted by the company suggests the public has little knowledge about which qualifications exist or how they compare. Some consumers, Which? says, were simply looking for "letters after the name".
The FSA is proposing QCF Level 4 as a minimum benchmark for financial advisers, independent or otherwise, but critics say Level 6 should, and eventually will, be the minimum.
A Which? spokesman says: "If consumers are to drive the demand for higher qualifications, then it is essential the alphabet soup of qualifications is simplified and communicated better to consumers."
As well as concerns about poor quality of advice, Which? says it is worried about the quality of products being sold by advisers.
"Product providers have typically designed products for the intermediary community rather than the end consumer," it says.
"This has resulted in problems for consumers with a number of products, from endowments and with-profits funds through precipice bonds and structured products."
Which? says while consumers "widely welcome" the move away from commission, some concerns remain, particularly around their ability to negotiate a fee with an adviser.
It quotes one consumer: "The people who don't feel very confident are still going to get ripped off. The reason you go to a financial adviser is that you are unsure about your finances, so the last thing you are going to be confident in is bartering with the adviser."
Which? notes: "Many consumers will not know what a fair price is, and may find the whole process makes them feel more vulnerable."
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