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Which? warned advice move puts consumer trust at risk

Advisers say consumer champion Which? risks losing consumers’ trust by engaging in commercial activities such as mortgage and protection sales.

Money Marketing revealed this week that Which? is to begin advising clients of its mortgage advisory branch on protection products, starting in autumn 2014. Previously advice was outsourced to independent adviser LifeSearch.

However, advisers say the move could lead to consumers losing faith in the copmpany’s impartiality.

Plan Money director Peter Chadborn says: “As a consumer group, the further Which? forays into this kind of activity, the more they will dilute consumers’ perception of trust.

“It is very hard to call yourself a consumer champion while you are effectively selling products at the same time – because that is what’s happening here; they have set up a sales team.”

Highclere Financial partner Alan Lakey says similar questions around impartiality were raised when Which? set up its mortgage advice arm 18 months ago.

He says: “When the mortgage advice branch was set up, it did lead to questions. How do you maintain an unbiased approach to advice when you are charging fees for selling a product?

“Are they independent in the analysis they conduct, which has been their strength historically, or are they now relying on consumers as customers?”

John Charcol senior technical manager Ray Boulger criticises Which? for failing to offer a whole of market proposition.

Boulger says: “How on earth can it be an entirely impartial advice service? By definition if you are setting up a panel of providers you are not offering whole of market advice, which just further dents the notion that you are an impartial and unbiased service.

“The more areas they go into on a commercial basis, the more they open themselves up to these questions.”

A spokeswoman for Which? says: “Which? achieves positive change for all consumers by providing genuinely impartial advice and services that put consumers’ needs first. Any profits we make from our commercial enterprises are ploughed back into our work for all consumers.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. I echo the comments above and continue to wonder why don’t businesses simply stick with what they’re good at…?

    Unfortunately it feels that Which? is another entity looking to squeeze every last drop of commerciality out of their well established position.

  2. If the panel of providers that are being offered are along the lines of the Which? ‘best buys’ ratings then I can’t see how the interests of the clients are harmed?

    All advisers should be looking at the quality of the product over the cheapest options in any case – a panel of a quality and competitively priced product seems logical for a consumer champion?

    You wouldn’t expect Which? to be offering a product which is inferior and does not provide value for money so it makes sense to remove them from the offering.

  3. @PJ-Botham,

    This can be argued as being true for clients who are standard risk and would be accepted on the standard terms, however, what about client’s who have health issues or undertake dangerous hobbies for example?

    There can be big differences in the loadings applied due to issues such as these so they aren’t necessarily offering the consumer the best value for money if they aren’t able to assess the whole market.

    Will their panel include the Friendly Societies so that manual workers can obtain cost effective income protection? Will it include the specific Friendly Societies who will provide income protection to offshore workers? Will their panel include an impaired life insurer?

    I think this move by Which? opens them up to a whole host of potential criticism and could easily tarnish their reputation as a consumer champion.

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