'Most banks give poor investment advice'

BANKS and building societies are failing to give their customers good investment advice, a consumer group said today.

Which? said just four of the 37 branches of high street banks and building societies visited by its researchers in an undercover investigation gave good advice on investing a lump sum.

The remaining 33 failed to pass its test, often by recommending inappropriate products without properly explaining the risks, or because they failed to get the basics of good advice right.

The researchers posed as retired savers with a 55,000 lump sum to re-invest from a maturing one-year fixed-rate bond, which had paid a return of 7 per cent.

The group said 21 out of the 37 advisers suggested the researcher put money into products referred to as "capital-guaranteed", but eight wrongly said these funds posed no risk. Six advisers recommended an investment bond, but failed to fully explain the risks of such a complex product.