A sorry tale: advice standards in the IFA community

Just before the August bank holiday, the FSA produced a report of the mystery shopping and firm visits on which it based the hair-raising conclusions about advice standards contained in the recent Treating Customers Fairly (TCF) materials. The account of 55 firm visits and 50 mystery shops, all to IFA businesses, is enough to make anyone seriously concerned about the safety of financial advice, writes Adam Samuel.

Adam Samuel Dip PFS, LLM, barrister and compliance consultant can be contacted on tel 020 7435 2620; email AdamSamuel@aol.com, website www.adamsamuel.co.uk His book, “Complaints and Compensation: a Guide to the Financial Services Market”, is available from www.cityandfinancial.com and www.adamsamuel.com.

The review focused on impartiality, assessment of needs, the quality of recommendations and communication to customers. Just over a third had very limited traces of TCF in their treatment of customers. Only 14 out of 50 of mystery shop firms showed significant traces of Principle 6.36 out of 50 needed to improve and 21 needed “to eradicate non-TCF elements from their advice process”.