Consumer confusion over financial advice - Annuities - News - Moneyfacts


Consumer confusion over financial advice

Consumer confusion over financial advice

Category: Annuities

Updated: 27/10/2011
First Published: 27/06/2006

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

One year on from the radical shake-up of the financial advice market unleashed by the FSA through depolarisation, new research from IFA Promotion has revealed worrying signs that 84% of UK adults still don't understand the different types of advice now available, writes Richard Eagling.

The findings come at a time when the concept of independent financial advice appears to be more popular then ever, with 90% of people claiming that seeing an 'independent' adviser is important to them. Meanwhile, 95% believe it is important that the adviser can recommend the most suitable products from the whole of the market; with 88% claiming it is crucial that an adviser has no commercial ties to product providers. However, the research makes clear that what people want is not what they are actually getting. Of the 6.6 million people who saw an adviser in the last 12 months, 72% believe they saw an IFA, just 10% think they saw a multi-tied adviser and 13% believe they took advice from a tied adviser.

David Elms, Chief Executive of IFA Promotion, commented: "Our annual research confirms that nearly twice as many people end up taking advice from a bank or building society as see an IFA, although most clearly prefer the concept of independent financial advice.

"The FSA introduced the biggest changes to the financial advice market for sixteen years to offer clearer choices and make it easier for people to shop around. However only 27% of people who have taken financial advice in the last year actually feel they know the difference between the three different types of advice. Given this widespread confusion, there has never been a more important time to relay to consumers the benefits of seeking whole of market, independent financial advice, and most importantly, how to find it."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Secondary annuity market scrapped

The Government is cancelling plans for a secondary annuity market, citing concerns about consumer protection. Given there were fears that many could be ripped off – and that it wouldn’t be right for most – the decision has been largely welcomed.

2016 ILP Moneyfacts award winners announced

The winners of the 2016 Investment Life & Pensions Moneyfacts Awards were announced last night at a glittering ceremony held at the Lancaster London Hotel, amid much expectation and excitement.

2016: the worst ever year for annuity income

Tomorrow marks Pensions Awareness Day (PAD), yet our latest research doesn’t bode well for the sector – at least not for those seeking an annuity, with the data showing that annuity rates are on track for their biggest ever annual fall.