topic 9

• Need for financial advice


  People need advice and information before making a buying decision to help them make informed choices
• People should take into account factors that might change during the period they are using the product, for example, changes in their circumstances or the economic situation in the country
• Making a bad choice can have unfortunate consequences. With medium to long-term investment, it would be more inflexible (mortgage) and people need to know the facts before committing themselves
• While the laws provide some protection against bad advice and the selling of unsuitable products, consumers should remember that there is always a risk. Nobody can predict the future of economic conditions and change in unexpected ways
• Making a financial decision

  1. Own needs, wants and aspirations

  2. Solutions and providers available

  3. Details of product brands
• Small print


  The terms and conditions of a product
• The FCA requires the information given by financial services providers to be fair and not misleading and to highlight any special risks
• Providers must give prospective customers clear and relevant information
• The provider should point out to the customer any costs, penalties or other obligations attached to the product to try to ensure that the product is suitable for the customer's circumstances
• Ways to obtain information directly from providers

  • Marketing brochures and leaflets
  • Provider website
  • TV and radio advertisement
  • Provider staff
• Information can be good, but it is better to seek professionals for information and advice
• Sources of information from the media


  • Money box (BBC Radio 4)
  • Newspapers
  • Price comparison website
• Money helper

  Independent service
• Money health checks


  1. Attitudes to managing money

  2. How far they rely on borrowing and how far their money stretches

  3. How could they cope with an unexpected cost

  4. Age, marital status, and work situation
• When they have answered all the questions, a person gets feedback in the form of an action plan, which is broken down into steps to show them what they need to think about and what they can do about it
• Money helper is responsible for financial education, and it works with a wide range of stakeholders in industry and government
• Topics covered on Money helper website

  • Different life events
  • Everyday money and benefits
  • Money topics
  • Tools and resources
• Citizens Advice campaigns on the issues that are causing people problems and seeks to create a public debate
• Steps to a debt-free future (StepChange debt charity)

  1. Decide to get debt help

  2. Access advice via its anonymous online debt remedy tool or call the telephone debt helpline and speak to an expert adviser

  3. Use the practical solution that works for them
• National Debtline is a national telephone helpline for people with debt problems in England, Wales, and Scotland. Its services are free, confidential, and independent
• Independent financial advisers


  • Offer a broad and comprehensive range of retail investment products
  • Gives consumers unbiased and unrestricted advice based on their comprehensive and fair analysis of the relevant market
  • Tell consumers that they operate as independent advisers before providing any advice
• Restricted advisers


  • Can recommend only certain types of products from one or a limited number of providers
  • Can offer advice only on the particular products of the particular companies
  • May choose to specialise in a particular market, such as pensions or ethical investments
• The retail distribution review prevents financial advisers and sales staff from being paid commissions by the firms whose products they are selling
• An obvious source of advice, but not always a reliable one, is members of the family and friends