Tony HazellNov 29 2017

Liar, liar, pants on fire

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A Which? report revealing how advisers are lying about their qualifications suggests this industry has a long way to go before the public can feel secure when seeking financial help.

Let us leave aside for a moment the ease with which advisers were able to post false claims on Unbiased and other websites that are supposed to help the public find an honest adviser.

Their procedures clearly need checking. After all, if it was so simple for Which? to unearth their lies, it should not be rocket science for those who profit from running the websites to do it too.

The real questions are: what were the advisers thinking when they posted their lies and why did the Financial Conduct Authority not spot it and do something?

Let us consider: Which? found seven out of 24 firms falsely claimed to be accredited by the Society of Later Life Advisers. What was their motive: to lure elderly people by claiming to have knowledge and qualifications they did not possess?

Fourteen out of 72 claimed to have advisers with chartered financial planner status despite not employing anyone with this credential. Was the idea to attract people who might not be impressed with lesser qualifications?

You might be concerned that these lies could lead to bad advice, but it seems the FCA was enjoying a quiet snooze and missed this.

If the adviser will lie about their qualifications, what else will they lie about? Their fees, the suitability of the product, the income being produced?

I know a number of financial advisers who will not pay to be on Unbiased. I do not blame them.

While advisers can lie about their qualifications with such ease, these search websites are useless for consumers. 

How can they know if they are getting an honest adviser or a liar?

What consumers need is a proper listing of advisers qualified in various specialisms provided by the regulator. That is something that goes far beyond the FCA register.

Unbiased has said it is querying more than 2,000 outstanding qualifications and accreditations held by 27,000 professionals and is working to find a good solution to check them more efficiently. It also claims it remains committed to resolving any inaccuracies.

Shame it did not do that before really, because Which? produced a similar report six months ago with similar findings. 

But the greater shame is that the FCA has once again been exposed as a watchdog that neither sniffs out potential problems nor barks in defence of consumers.

More shady operators

While we are on the subject of dodgy advisers, should we be surprised that shady characters turned up at Port Talbot seeking to make some fast money out of steel workers' pensions? Sickened, yes, but surprised, no.

There are some working in this industry and others who attach themselves to it who lack the moral compass that guides the rest of us.

So, workers have been bombarded with approaches from financial advisers looking to make some money while telling them what to do with their pensions.

There is a fine line here. With pension freedoms people will need advice to work through the options.

Should they go for the secure, but smaller pension, or take the cash?

It is this cash option that holds the dangers. For the most part these will not be sophisticated investors, yet many will have a considerable pension pot and face temptation.

It is a potential festival for rogues and rotters. 

In this case the FCA does appear to have arrived at the scene of a potential crime in good time. 

It needs to keep right on top of this. If it means some impeccable advisers suffer undue scrutiny, that is a fair price to pay to protect these pensions.

Lifetime mortgages

It is a warm welcome to Nationwide with its first lifetime mortgage. Mainstream lenders are long overdue on the equity release scene.

The decision to offer equity release completes the about-face from the days when lending to older customers had become severely restricted.

With rates starting at 3.8 per cent for the smallest loan to value it looks competitive. 

The early repayment charges are stepped, starting at 6 per cent and reducing to 3 per cent after five years, 1 per cent after 10 years and vanishing after 15 years.

That again looks a much better proposition than the penalties for life that came attached with equity release in the past.

This is a thoroughly modern equity release product and will help introduce new life and competition where it is desperately needed.

Tony Hazell writes for the Daily Mail's Money Mail section