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Cable says Which? shows need for ‘genuine independence’

Liberal Democrat Shadow Chancellor Vince Cable is calling for an independent system of financial advice which is not driven by advisers trying to earn commission.

Cable’s comments follow on from the Which? report published last week which found that fewer than a third of advisers give what Which? describes as the “benchmark for good advice”.

In its mystery-shopping exercise, Which? visited 57 firms of different types and found that only 26 per cent of financial advisers were giving what it deemed correct advice. The failings included poor fact-finds and failure to provide information on key facts and costs.

IFAs came out on top, despite only 34 per cent of them passing the Which? test, but tied advisers were significantly worse, with only 16 per cent providing Which?’s acceptable standard of advice.

A third of tied advisers visited were found to have offered misleading advice, with one tied adviser at Bradford & Bingley claiming he was free to choose which protection provider to use despite being tied to Legal & General.

Cable says: “This finding emphatically underlines the growing and glaring need for a genuinely independent system of generic financial advice which does not depend on the self-interest of people trying to earn commission.

“The Government has put a lot of money into financial education and is supporting the principle of a levy on City companies in order to strengthen financial education. However, this report makes it clear that a more urgent problem is the lack of independent financial advice which people can access before they run into serious debt.”

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