Five Questions About: Advice from banks

  • @simonnread

Thought we didn't trust banks any more. Why would anyone turn to them for advice?

Good question. Presumably because lots of people have nowhere else to turn.

Fair enough. But what sort of advice can they expect from banks?

It could be unsuitable or poor, according to the results of a mystery shop on investment advice published by the Financial Services Authority this week.

That's pretty damning. But that's what we expect, isn't it?

To be fair to the banks, things have improved since similar research in 2008. This time around just 11 per cent of bank advisers handed out unsuitable advice, while in a further 15 per cent of cases, the adviser didn't get enough information from the customer to be able to judge whether their advice was good or bad.

So almost three-quarters of advice from banks was OK?

At best it was probably adequate. An independent financial adviser told me this week that she can only cope with three or four client meetings a week to ensure she gives good investment advice. Bank staff make up to six appointments a day!

So I should try and find an independent adviser?

Yes. I reckon you're much more likely to get advice based on a deeper understanding of your plans.