One in eight people who received financial advice in the last 12 months claim to have been mis-sold an investment or pension product, according to a survey by the Financial Conduct Authority.
The FCA’s Financial Lives Survey 2017 interviewed 13,000 people and asked them a number of questions regarding their finances.
It found that 13% of those who’d received advice in the last year believed their advisor had mis-sold them a pension or investment product at some point during the transaction. Those who received financial advice more than 12 months ago also said they’d received incorrect advice. One in seven (16%) believed they’d been mis-sold a pension or investment product while one in five (21%) said they’d received poor advice that didn’t qualify as mis-selling.
Although these figures are worrying, the FCA believes that their findings underestimate the issue as a whole. A spokesperson said: “The Financial Lives Survey 2017 did not investigate past perceptions of mis-selling or bad advice with other adults who may have had regulated advice in the past. Consequently, our findings will underestimate the proportion of all UK adults who perceive they have been mis-sold a product or received bad advice from an advisor.”
The FCA’s survey also assessed whether consumers are being approached in an unethical way when it comes to their finances. It found that almost one in five (18%) of people had received calls, texts or emails claiming to be from the government and offering retirement planning advice or a free pension assessment.
A worrying 8% had received requests from scammers requesting personal information or attempting to access their pensions.
The survey also revealed an overall lack of understanding regarding the pension industry, exposing many people to poor financial advice. For example, two million UK adults believe they have a defined contribution pension but don’t understand how it works.
Meanwhile, 15 million people in the UK still don’t have a pension, despite the government’s introduction of the auto-enrolment programme.