Researchers conducted a year-long undercover investigation although the report never surveyed independent mortgage brokers concentrating entirely on tied advisers with estate agents, banks or building societies.
The investigation into life, critical illness and income protection sales concluded that just one out of 39 advisers gave acceptable advice, asked enough questions and made the right recommendation. Of the rest 23 recommended life insurance that wasn’t needed and of 30 advisers who recommended cover, only 11 worked out how much their ‘client’ could afford.
Malcolm Coles, editor of Which?, recommended that under regulation the FSA continues to mystery shop because regulation may not be enough.
But, Danny Lovey, broker at The Mortgage Practitioner, said: “One of the problems the financial services industry has is the pressure put on people working for the bigger companies to ‘sell’ rather than advise. The most responsible people are the smaller firms who have the long-term interests of their customers at heart.”
Steve Langrick, spokesman for IFA-Online, said: “How many clients out of 39 know what sick pay they would receive from their employer? As an adviser should you quote for MPPI, PHI or leave it blank for further discussion? Keep up the good work you whiter-than-white souls at Which? Never knowingly sensationalist.”
