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Beware the financial adviser

A consumer group has launched a withered attack on financial advisers, after publishing a 60-page report showing that many consumers are being advised to switch pension products to ones that incur higher charges or more risk, leading to thousands of pounds being wiped of the value of the fund.

Christine Farnish, Chair of Consumer Focus which undertook the research, said: 'Too many consumers are being persuaded to switch their pension into different pension products which may well leave them worse off.

'Others are signing up to paying trail commission to their adviser for the life of the product – which may be decades – without receiving any tangible benefit. The FSA needs to get a grip on this market and tackle consumer detriment as soon as possible.'

But the IFA industry hit back, saying the report 'appears to be very thin on evidence', adding: 'Extrapolating industry wide conclusions from only 31 individual examples of advice, for example, is not robust research. There is also no attempt to assess the value of the advice given.'

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