Two thirds of financial advisers fail standards test

Flynn_2

baby_boomer wrote: »

Which? has an institutional agenda like any other organisation. One of their aims is self-promotion so that they can get their salaries paid.

Whether they have any "institutional agenda" is for you to decide and a different matter.

The trustees of any charity, including the Consumers' Association/Which?, cannot receive salaries or any remuneration, their employees can. Nor does it alter the position that they are a charity legally required by the specific terms of their own mem and arts to be impartial.

Neither applies to "Unbiased.co.uk" or the many other consumer magazines (or even to this website) that consumers rely on for advice.

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Flynn_2

dunstonh wrote: »

The other thing is that Which? have the assumption that clearing debts should have been recommended and are measuring that as the response they should have had. Yet that is a flawed assumption. Whilst short term debts with higher interest rates should be cleared, things like mortgages where the rates are typically 5-7% can easily be beaten with investments over the long term.

While your judgement rather than theirs may be right or wrong, it is obviously an opinion that is financially beneficial to financial advisors and so may or may not be biased.

Far better for a client to have a mortgage, with any fees available going to an advisor, plus savings used to buy managed investments that also pay a fee to an advisor (because only managed investments provide the fees advisors like) rather than use savings used to pay off a mortgage with no fees for the advisor.

That's one of the reasons why it's so hard to get unbiased advice.

dunstonh

While your judgement rather than theirs may be right or wrong, it is obviously an opinion that is financially beneficial to financial advisors and so may or may not be biased.

There is nothing biased about it. The figures in this respect are factual. The only area of judgement is the decision and opinion and risk profile of the individual.

Far better for a client to have a mortgage, with any fees available going to an advisor, plus savings used to buy managed investments that also pay a fee to an advisor (because only managed investments provide the fees advisors like) rather than use savings used to pay off a mortgage with no fees for the advisor.

Is it better to invest tax free using your ISA allowance each year and for potential of returns of 5% above the interest paid on the mortgage or is it better to pay off the mortgage and not utilise your ISA allowances?

That is a debating point which will find some will invest and some will repay the mortgage. There is no right or wrong here.

That's one of the reasons why it's so hard to get unbiased advice.

What about the times recommendations are made which dont pay as much as the alternatives? Its easy to focus on the times one option pays more and that is the chosen option but it does work both ways.

Flynn_2

dunstonh wrote: »

That is a debating point which will find some will invest and some will repay the mortgage. There is no right or wrong here.

Do you mean a "debating point" or a point for debate?

It clearly benefits a financial advisor for a client to both keep their mortgage and to use their savings to buy managed investments from him, rather than pay off the mortgage.

You earn your living flogging managed investments and/or mortgages and therefore have a reason to be biased. I don't and neither do Which?.

EdInvestor

The article actually says

In April and May this year, eight Which? researchers posed as individuals who had received an inheritance of around £30,000 and wanted advice on the best place to put it. They had savings of £3,000, a mortgage and a personal loan.

Which? said it was also disappointed that, based on the scenario presented to them, half of all advisers did not recommend paying off debts before investing the sum.

Seems to me the comment about debt refers to the personal loan, not the mortgage.

dunstonh

It clearly benefits a financial advisor for a client to both keep their mortgage and to use their savings to buy managed investments from him, rather than pay off the mortgage.

It clearly benefits the supermarkets that we eat food but that doesnt stop you buying food.

You earn your living flogging managed investments and/or mortgages and therefore have a reason to be biased. I don't and neither do Which?.

I earn nothing for posting on these forums. I have no bias. I also invest money although I have a mortgage. I don't earn any commission from my own investments as they are commission free. However, you have shown a number of times in your posts before that you have a bias against financial services.

Seems to me the comment about debt refers to the personal loan, not the mortgage.

It doesnt say though. If you look at the research notes for the article, you will see they are very vague. Certainly not enough for any concrete advice to be given.