Should banks be able to provide financial advice

The Author

Graham Bond is a fully accredited and qualified financial adviser, based in Bristol in the UK. You can find out more about his services at the website of his company, Consilium Asset Management.

As a financial adviser, who has dealt with personal financial planning over the years, I have in many cases dealt with clients who had previously received advice "from the adviser at their local bank".

When the four main banks in the UK recommend products it is usually from either one or a very small number of product providers. This is classed as tied advice. In stark contrast Independent Financial Advisers are able to offer whole of market advice.

Several IFA's and Financial Publications have recently complained about the advice given by bank based advisers. The criticism relates to the types of products the banks seem to be recommending.

Investment Bonds are insurance based products offered by life assurance providers. Whilst in some circumstances these types of products might be suitable for a client, it seems that Bank advisers are recommending these types of products over more tax efficient products such as Individual savings accounts and collective investments.

Citywire has alleged that commission from investments bonds seem to be driving banks into recommending these products. The commission from investments bonds are far greater than ISA's or collective investments. Combined with the advisers being targeted , I can understand why these products seem to be recommended on a regular basis.

Hopefully, the situation will change if the proposals of the Retail Distribution Review are implemented. Advisers will then need to agree in advance, with the client, how they are to be remunerated before they carry our any work. The cost of the advice will have to be deducted from the investment, making it much clearer for clients to understand.

In my opinion, Independent Financial Advice has and always will be the most appropriate form of advice for clients. IFA's can offer a level of independence and impartiality that cannot be offered from tied advisers.

For more information about Investments and how we can help you please visit our website www.consilium-ifa.co.uk.

If you are considering investing it is important to remember that the value of your investment and the income generated could fall as well as rise and that there is no guarantee you will get back more than you invested.

The opinions expressed here are general, and are not intended to constitute advice for any individual. For best financial advice, speak directly to a qualified financial adviser to discuss your own unique circumstances