Is there any such thing as free advice?

Apparently the FSA mystery shopping exercise looking at Bank advisers discovered that some of them have been claiming that the ‘advice’ they provide is ‘free’.

Not only would the adviser not be paid for the advice but his employer the bank wouldn’t be either.

This I am afraid is what happens when the advice part of financial services is inextricably bundled up with product.

If an adviser only gets paid for their advice if you agree to buy a financial product then do not be surprised if the outcome of that advice delivery is the recommendation that you buy an investment or pension plan.

Whilst the regulator of financial services has abolished the payment of commission from new pension and investment products, the replacement mechanism known as adviser charging means that the adviser can still be paid by a deduction from any financial product that they recommend.

Some advisers therefore are still going to be motivated by the need to sell you a product.

After all if they don’t they won’t be paid. Nor will their employer make any money.

It must surely be the case that the consumer understands that all financial organisations are in it to make profit (nothing at all wrong with that) but they should not be conned into believing that quality independent and impartial advice is free.

If it is presented to the consumer as being free it will certainly not be free of the sales pitch.

Our advice is simple; don’t expect advice from the Banks.

If you want proper financial advice, pay for it directly and get it from a suitably experienced, suitably qualified independent financial adviser.

There are plenty of them ready willing and able to help you.