A mystery solved: how to ensure suitable investment advice

The FSA’s recent mystery shopping assessment of the quality of investment advice given by banks and building societies found that 11% of visits resulted in unsuitable advice, while in another 15% not enough information was obtained. Rebecca Prestage examines the report and previous guidelines for clues on how to provide consistently suitable advice.

Rebecca Prestage – a chartered financial planner with over 20 years’ experience in financial services – is head of policy at The Consulting Consortium (www.theconsultingconsortium.com).

In its incarnation as the Financial Services Authority, the regulator published various guidance documents to assist firms with the quality of the advice they provide. It recently conducted a mystery shopping exercise within the banking sector to assess, first hand, whether or not customers are receiving suitable investment advice. If the results of this mystery shop, published in February, are in any way indicative of the rest of the market, it is apparent that firms have more work to do to ensure that customers receive sound, suitable investment advice, all of the time.