Which? wants non-advised ban widened

12 January 2012 10:30 am | By Paul Thomas

Which? wants the FSA to extend its proposed non-advised mortgage sales ban to other product areas to deal with poor bank sales standards.

In its final MMR consultation paper the FSA proposed to ban non-advised sales where there is “a spoken or other interactive dialogue” between a customer and a firm, although high-net-worth borrowers can opt out of advice.

Which? Money editor James Daley says: “In too many cases, banks use the split between what is advised and non-advised to get themselves off the hook, in terms of taking responsibility for the sale. What providers need to be asking themselves is, are we taking the right precautions to ensure customers walk out of the door with the right products? It is not just mortgages where this is important, we think it is incredibly important to savings products such as structured deposits too, so we think it would be good to roll out more widely.”

Churchouse Financial Planning director Keith Churchouse says: “A very good example where banning non-advised sales would be beneficial is with Sipp sales. Customers are not always clear whether they have had an advised sale with these products, when they should receive advice.”

Aifa director Robert Sinclair (pictured) says: “The FSA mortgage proposal is a step forward but I think it is a particular type of customer that needs advice and not necessarily a certain product, so we should be careful about isolating further individual products.”

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Readers' comments (10)

  • Anonymous | 12 Jan 2012 11:15 am

    Banning non-advised sales of more products isn't the answer to combat poor bank standards. If proper, robust processes are in place and followed correctly, there is no issue with non-advised sales of certain products.

    I agree with Robert Sinclair's comment that it is a certain type of client that needs or wants a non-advised sale, not necessarily a type of product.

    If banks have poor sales standards, then they should have firm action taken against them to ensure their standards raise to the level expected and required of the rest of us.

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  • Bill Wells | 12 Jan 2012 11:16 am

    So, because the banks give such awful advice every customer should be forced to sit and listen to it ! I assume the logic here is that the customer can then make a complaint about the advice he received whereas if he ignores the advice he will give up that right.

    Here's an alternative idea - why not make the banks clean up their act, employ people who have a clue, and ban sales targets.

    Then, Joe Public might start receiving decent advice and have no need to complain.

    No, I suppose that would be too radical for the regulator to contemplate.

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  • Chris F | 12 Jan 2012 11:20 am

    In my experience a consumer has a far better chance of ending up with the wrong product if they receive advice from a bank "adviser".

    A better outcome would be to insist that banks cannot provide "advice" at all.

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  • Anonymous | 12 Jan 2012 11:37 am

    If non advice is banned who is going to pay for the advice given when commission is banned and clients cannot or will not pay fees

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  • kevin murphy | 12 Jan 2012 11:56 am

    @ anonymous

    The obvious will happen - lots of consumers will end up with something even worse than the wrong product - NO product.

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  • Simon Webster | 12 Jan 2012 12:26 pm

    @Kevin Murphy 10/10 - it's what many of us have been saying for years.

    Fee or commission is not and never has been the issue. The issue is quality of advice which several pieces of research clearly demonstrate the banks are structurally incapable of delivering consistently - if at all.

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  • Anonymous | 12 Jan 2012 2:11 pm

    banks should stick to banking, advisers to advising.

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  • acc | 12 Jan 2012 4:18 pm

    Simon and Anonymous above - Quite right on both counts - it is that simple and always has been!

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  • acc | 12 Jan 2012 4:18 pm

    Simon and Anonymous above - Quite right on both counts - it is that simple and always has been!

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  • Peter Herd | 12 Jan 2012 11:05 pm

    This is the end of execution only business and thank god for that.

    For those that do not like that - you know where the door is.

    It will be up to those that are left to build an advisory profession like solicitors or accountants and people pay for those services.

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