FSA slated for failing to act against poor bank advice

The Financial Services Authority’s (FSA) failure to clamp down on poor financial advice in banks and promote independent alternatives shows it is ‘hostile to consumers’, it has been claimed.

A recent undercover investigation by Which? found just five out of 37 advisers in banks and building societies gave ‘good' advice, with the rest misjudging the risk appetites of customers, directing them towards high-commission products or not giving them adequate information.

Phil Billingham, strategy consultant at Threesixty, said the findings merely echoed previous research and once again brought into the spotlight the FSA's failure to back independent financial advice.

"Everybody gets tarred with the same brush and the FSA attaches no importance at all to the independence or integrity of advisers," he said

"The FSA has never acknowledged that independence is the best. Being agnostic about it is beyond bizarre.

"If the FSA actually cared about consumers, it would support independent advice, and the fact it does not makes it hostile to consumers."

Billingham also suggested an example should be made of some of the offending financial advisers in order to improve the quality of service in banks.

He added: "If the FSA or Serious Fraud Office went into the branch of one of these banks and arrested an adviser or manager, people might pay attention."