Simon Read: Who can you trust for decent advice?

Two-thirds of financial advisers have failed a "good advice" Which? test, the consumer body revealed this week. It sent its undercover investigators – posing as customers – to 40 advisers, 12 of whom were billed as equity release experts. Shockingly, only five of the experts passed the test, with just eight of the remaining 28 proving up to the mark.

If I was feeling uncharitable, I would say that it's a surprise as many as a third actually passed. But let's not use these results as a stick to beat financial advisers with – the industry does that itself with a constant stream of them rapped or fined by the City watchdog for rule-breaking or even fraud.

Indeed, just this week the Financial Services Authority has banned and fined two directors of a Yorkshire-based financial group for their misleading promotions and the mismanagement of an investment scheme that put 53 customers at serious risk of losing nearly £10m.

It banned an Essex mortgage broker for fraud the week before and, the week prior to that, an East London mortgage broker was made bankrupt for failing to pay a fine for mortgage fraud.

But let's presume – no matter how hard it may be to do so – that it's a surprise these financial advisers have been found wanting in the Which? survey. Instead, let's focus on the equity release issue.

The schemes are designed as ways for older people to get at the cash locked in their home. They get a largely bad press, chiefly because they are often promoted as being a way for people to get cash to enjoy their retirement when, in reality, they are best used as a last resort for older folk in financial difficulty. As such, they can be perfectly fine for some.

But – and here's the key – older people have a lot of options and anyone advising them about equity release should explore them. A failure to do so is a failure to give decent and fair advice.

In the Which? survey, more than half the advisers – 23 in fact – failed to conduct a simple "fact-find" on the customer. The fact-find can be a little tedious but, without it, an adviser can only guess at certain things. Worringly, seven advisers didn't even ask about the undercover researcher's income. Without knowing relevant facts, any advice is worthless.

This is particularly true when it comes to equity release, as it has several risks that should be flagged up. Some advisers didn't mention how quickly the debt would grow, or discuss the effect of compound interest. One even said there was no chance of using up all the equity in the customer's home "unless you live to 150". Clearly nonsense.

Which? has called for a tightening-up in the advice process, which I agree is a must. Andrea Rozario, director general of Safe Home Income Plans (SHIP), an organisation that represents equity release firms, concedes there are problems. "There are still improvements that could be made, and any advisers who are not confident in their skills should take action immediately," she says.

I'd go further and not allow anyone to advise on the issue until they can prove their competence and knowledge about the subject.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Arts and Entertainment
musicOfficial chart could be moved to accommodate Friday international release day
Wes Brown is sent-off
Italy celebrate scoring their second try
six nations
Glenn Murray celebrates scoring against West Ham
footballWest Ham 1 Crystal Palace 3
Arts and Entertainment
Drake continues to tease ahead of the release of his new album
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: HR Benefits Manager

    £40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

    Recruitment Genius: Office Manager / Financial Services

    £30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

    Jemma Gent: Year End Accountant

    £250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

    Jemma Gent: Management Accountant

    £230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

    Day In a Page

    The Last Word: For the good of the game: why on earth don’t we leave Fifa?

    Michael Calvin's Last Word

    For the good of the game: why on earth don’t we leave Fifa?
    HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

    Scientists hail daily pill that protects against HIV infection

    Breakthrough in battle against global scourge – but will the NHS pay for it?
    How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

    Time to play God

    Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
    MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

    MacGyver returns, but with a difference

    Handyman hero of classic 1980s TV series to be recast as a woman
    Tunnel renaissance: Why cities are hiding roads down in the ground

    Tunnel renaissance

    Why cities are hiding roads underground
    'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

    Boys to men

    The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
    Crufts 2015: Should foreign dogs be allowed to compete?

    Crufts 2015

    Should foreign dogs be allowed to compete?
    10 best projectors

    How to make your home cinema more cinematic: 10 best projectors

    Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
    Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

    Manchester City vs Barcelona player ratings

    Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
    Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

    Monaco: the making of Wenger

    Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
    Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

    Chris Gayle: The West Indies' enigma

    Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
    In Ukraine a dark world of hybrid warfare and murky loyalties prevails

    In Ukraine a dark world of hybrid warfare

    This war in the shadows has been going on since the fall of Mr Yanukovych
    'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

    Homage or plagiarism?

    'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
    Broadchurch ends as damp squib not even David Tennant can revive

    A damp squib not even David Tennant can revive

    Broadchurch, Series 2 finale, review
    A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

    Inside the mansion of Germany's 'Bishop of Bling'

    A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower