The range of financial guidance open to the public needs to improve.
Such is the assertion of the Financial Services Consumer Panel, after a recent study indicated that the current framework for advice is full of "confusion". It was suggested that the majority of people are unable to distinguish between the different types of financial adviser that are available, whether they offer assistance on loans, investments, current accounts, savings schemes or other monetary products. The research indicated that the majority of people often described such advice as "independent" even when it has come from someone working for a bank or a 'tied' financial adviser.
However, upon being prompted to think more about the different types of financial guidance available, a significant number of people stated that they are aware that many advisers cannot be independent as they receive commission from product providers.
The study also showed that the main reason for why Britons use a financial consultant is because they can offer help on where to invest their money. Meanwhile, many consumers like to be able to discuss their fiscal standing with someone who has more knowledge and experience of the economic markets than they do. In addition, seeking out sufficient monetary advice may well help many people to get a cheap loan or other forms of competitively-priced credit effectively.
John Howard, chairman of the Financial Services Consumer Panel, said: "Our research shows that the financial advice market is in urgent need of change. At the moment consumers are generally confused about the type of advice they are receiving and, appalling though it may seem, many people are now simply resigned to not getting the best advice when they talk to a financial adviser.
"The Financial Service Authority's Retail Distribution Review must establish truly independent advice and clearly distinguish it from mere sales. The research also suggests a pent up demand for a properly funded and promoted generic advice service. This would act as a trusted gateway to financial services for the many consumers who lack confidence in the system, or their own ability to engage with it."
Research from the organisation also showed that those who have little monetary experience often do not fully appreciate fiscal guidance. On the other hand, those who are well off were indicated as thinking they know more than the professionals and can conduct their own matters themselves. Such consumers, it was suggested, also believe that financial advisers only target rich people. This led the institution to claim that the creating of generic financial programme would help encourage those who lack knowledge to seek out help on areas like personal loans and savings. Consequently, this could help many to get to grips with their spending.
Indeed, such guidance may be useful to an increasing number of Britons after Colin Jackson, director of Baronworth, reported that people need to be disciplined when it comes to reducing pressures on finances and saving more often. He added that should consumers continue to use credit cards to make mortgage payments then they may find they are in a "spiral" of monetary problems. Such people may realise that, after getting guidance from a recognised professional, a consolidation loan may prove to be a helpful way to manage money.
