New financial advice fee structure puts older people at risk of mis-selling and fraud, say researchers

Research carried out by two UK universities suggests that elderly people may be reluctant to pay flat fees for professional financial advice under the new charging regulations.  And the result is that they are taking advice from family and social services staff instead.

The research, by the University of Hull and Bournemouth University and sponsored by the Institute of Chartered Accountants of Scotland, is said to be the first major study conducted since the payment of commission to financial advisers selling investment products was banned at the beginning of the year.

Research carried out by two UK universities suggests that elderly people may be reluctant to pay flat fees for professional financial advice under the new charging regulations.  And the result is that they are taking advice from family and social services staff instead.

The research, by the University of Hull and Bournemouth University and sponsored by the Institute of Chartered Accountants of Scotland, is said to be the first major study conducted since the payment of commission to financial advisers selling investment products was banned at the beginning of the year.

Commentators are warning that older people are increasingly in need of professional financial advice as the risk of mounting debt increases.  Plummeting savings rates, rising living costs and the complexities of annuities and equity-release are all leaving many older people in need of sound money advice.

And the potential for mis-selling and fraud is perceived to be higher if people are relying on advice – however well-meaning – from friends, family and non-financial professionals. 

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