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BBC Moneybox reveals failings on basic advice

BBC Radio has gone undercover to investigate the standards of financial advice offered to clients by independent and tied financial advisers.

“The Price of Advice”, produced by Radio 4&#39s Moneybox team, is aired this week and highlights how many advisers fail to provide basic advice.

Researchers and reporters went undercover, taping interviews with 10 tied advisers and eight IFAs in a mystery shopper exercise. The BBC then brought in a panel to assess the advisers&#39 performance.

There were two “tests” in the scenario which involved planning to pay off the shopper&#39s mortgage and move investments into the shopper&#39s wife&#39s name to take advantage of tax breaks.

It found that two out of the eight IFAs failed to discuss paying off the mortgage where it was the most appropriate advice, while three recommended keeping the loan. Tied advisers fared slightly better with two of the 10 failing to discuss it but six recommending paying it off.

The IFA sample consisted of a mixture of small and large practices in the Bristol area and branches of large tied advisers in South London.

Panel member and Sofa chairman Nick Bamford says: “I was disappointed by the lack of attention advisers paid to establishing levels of risk with their clients and on the products they were recommending. I would be mortified if any of my advisers behaved this way.”

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