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Blurring of advice and sales must stop

The Competition Commission’s recent investigation into the payment protection insurance market suggested some widespread reforms that will have important consequences for the wider personal finance sector.

One move whose implications seem certain to leak into other areas is the decision to force lenders to inform customers at the point-of-sale that ancillary products may not be the cheapest or best in the market.

Furthermore, they must be told to shop around to discover where the best deals are.

The CC warned that too many consumers are unaware that they can buy PPI from other providers. As a result, the CC introduced a package of measures including a seven-day PPI sales ban and mandatory personal PPI quotes and annual statements.

All well and good, as this seems to put brokers to the fore when consumers search for alternative protection products.

But it appears that one lender is already seeking to queer the pitch. An investigation by The Times into the loudly trumpeted impartial advice service Moneysense, offered by NatWest, seems to reveal it is little more than a method to transfer potential clients towards NatWest’s products.

This deliberate blurring of the boundary between sales and advice is lamentable in the current climate and will do little to mitigate the bad feeling consumers have about the financial services industry in general.

The authorities should move quickly to stamp out such abuses.

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