The cost of taking advice is becoming clear

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Where can you turn for financial advice? The bloke in the pub? Your window cleaner? Your bank? You may think you'll get more honest help from the first two these days, but for decent advice you need to go to a professional.

The financial advice industry has been tarnished by a series of scandals, ranging from insurance mis-selling through to blatant theft of clients' funds in isolated cases. Yet there are still tens of thousands of advisers out there willing to take cash from you in return for their help.

The question of whether they're worth the cash is an interesting one. With so much information about investments, savings and pensions freely available these days it is tempting to try and deal with what could be complicated financial decisions for yourself. Make a wrong move, however, and it could be an expensive mistake – with only yourself to blame.

The argument for going to an expert, on the other hand, is that they do it for a living and should be able to approach whatever financial question you have with much wider knowledge, whether it's pointing out tax implications, or explaining the potential risks of different opportunities, or even accessing deals that may not be available to the general public.

The key problem can be, however, finding an adviser that you feel comfortable with and can afford. And if you think you've received advice for free in the past, think again.

Advisers make money in two ways. Either they charge a fee for the advice, or they get paid commission on any product or plan you take out. Being paid commission can lead to the temptation for an adviser to recommend the product that pays them the most. That temptation can make their recommendations seem a little questionable.

For that reason commission is going to be scrapped from the end of next year. Instead, you will pay a set fee for advice. Also, as part of the process of cleaning up the industry, from January 2013 advisers must have qualifications equivalent to a certificate in higher education.

That is good news for consumers, but a new website is getting a head start on the new rules by offering access only to advisers who charge fees. But what makes the launch of interesting is that it wants the clients to rate the advice they receive from advisers. In fact, it will pay a small amount to people who complete a review for the site.

While VouchedFor is still in its infancy, if it takes off it could prove to be a valuable resource with not only access to decent advisers all over the country, but an at-a-glance look at what other people think of them. In the search to find decent advice, that could prove very useful. If you're looking for advice, you should also try, a detailed register of independent advisers.

Time for crackdown on dodgy debt firms

fee-charging debt management companies are exploiting vulnerable consumers, Citizens Advice warned this week. It has called on the Office of Fair Trading to impose tough sanctions on companies who flout the rules.

The charity helped with more than 3,000 problems relating to rogue debt management services and credit repair last year, and accused some debt management companies of charging excessive fees, offering vulnerable people inappropriate debt solutions and forcing people further into debt.

"People already struggling with their finances, who are trying to do the right thing and address their debt problems, should not be pushed over the brink by unaffordable fees or inappropriate services," said Citizens Advice chief executive Gillian Guy.

The Office of Fair Trading is currently consulting on debt management and credit repair services guidance. "The guidelines from the OFT set high standards for the debt management and credit repair industry," said Guy.

"However, guidelines alone are not enough. In the past, debt management companies have routinely flouted the OFT's guidelines, so these will need robust enforcement. The regulator must not be afraid to impose tough sanctions."

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