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Advisers who have sold clients "neatly packaged" structured products without adequately discussing the investment risks involved are giving the industry a bad name, a senior IFA has warned.

Anthony Coyte, head of investment for AWD, claimed IFAs who genuinely work with clients to construct portfolios and build a personal relationship face being "tarred with the same brush" as the adviser who simply sells unsuitable products without offering proper advice.

He added that advisers who have sold structured products as cautious, when in fact funds were being invested in things like bank shares, could well be making losses for clients in light of the major hits recently to the financial markets following Lehman Brothers' demise and merger talks surrounding HBoS.

He said: "The recent falls in the market have potentially exposed the advisers who were simply selling people products.

"And if people who bought into them were told they are cautious then that is quite a dangerous thing. It is very difficult where the relationship is often one of trust in terms of financial advice.

"An adviser may use structured products as part of an overall portfolio and would have explained the risks. I am not saying structured products are necessarily bad but you need to use them wisely.

"It may well damage the sector. In general terms I do not think it will be good for the industry. The public image of financial advisers has improved over time and has been quite low so this is bad.

"But as soon as those neatly packaged products are sold - but not fully explained - that effects the sector as a whole because in that context we are all tarred with the brush of the lowest common denominator."

Jock Cassidy, an adviser with Middlesex-based IFA Ashley Law, agreed with Mr Coyte and hit out at execution-only brokers, which he claimed were putting clients money at risk by selling on cheapness rather than suitability.

He said: "That can be very fool hardy because if the product is wrong for the client's needs they do not get any redress, but if it was an advised product sale the client has got some sort of redress from the broker.

"But it is still an increasingly popular way of buying investments, over the internet, on a non-advised basis. It is those buyers who are going to be the biggest losers.

"But any IFA who is ignoring their clients' wider needs at the moment is not being particularly far sighted, it is the worst thing they can do."