Mortgage advisers fail to give proper advice says Which?

Permalink: Mortgage advisers fail to give proper advice says Which?
by Lin Freestone

Consumer watchdog, Which?, has carried out an undercover investigation into mortgage advisers, which found that 41 out of the 50 advisers surveyed, failed to provide one or more piece of key information.

Researchers posing as first-time buyers were sent to banks, estate agents and independent mortgage advisers by Which?. Out of the 50 advisers approached, a staggering 35 of them failed to establish that the potential buyer could afford the loan.

Two-thirds of the advisers tried to sell insurance at the same time. This was often for an unsuitable product, and many failed to ensure that their advice fitted the individual’s needs.

The editor of Which? has said that listening to the needs of people and giving tailored advice should be the bread and butter of a mortgage adviser’s job. Too many of the advisers visited took a one-size-fits-all approach, or seemed more interested in selling an insurance policy on the side.

The survey concluded that only four out of 50 advisers gave acceptable advice. Three of these were independent financial advisers.

The results of the survey were published a day after the Financial Services Authority announced a crackdown on mortgage fraud, which includes brokers encouraging customers to overstate their earnings to get a bigger loan.

The expectation is for a big shake-up in the way financial advice is provided and paid for in an attempt to reduce consumer confusion.