2.5 The Consumer Environment and the Determination of Consumer Choice

Question 1

Who can consumers consult to get further advice on choosing between products and providers?

Answer 1

An independent financial adviser

Question 2

Independent financial advisers do what?

Answer 2

Research products and providers from the whole market and identify ones suitable for the customer.

Question 3

What type of products are most appropriate for using an IFA?

Answer 3

More complex ones such as pensions

Question 4

What are the advantages of using an IFA?

Answer 4

• The IFA is bound under professional rules

- Save the customer time

Question 5

Is there a fee charged for IFA’s?

Answer 5

Yes

Question 6

What are some of the questions that the FCA asked when investigating price comparison websites?

Answer 6

• Are customers being misled and are certain deals being promoted over others?
• Are there conflicts of interest?
• Are customers being misled into purchasing products that do not meet their needs?

Question 7

What were the results of the FCA’s investigation into price comparison websites?

Answer 7

• Some price comparison websites did not ensure customers were given the right information
• Some sites did not reveal conflicts of interest.

Question 8

What did the FCA’s study into the cash savings market focus on?

Answer 8

Interest-bearing cash savings accounts

Question 9

What did the FCA’s study into the cash savings market find?

Answer 9

• Accounts opened more than five years ago pay lower interest rates than those opened recently
• Providers are not making savers aware of alternative savings accounts with better interest rates
• Consumers are put off switching accounts as they think it will be a hassle and will not get much better rates

Question 10

How has the Government raised levels of financial capability?

Answer 10

By including money management and financial education into the curriculum for the school year starting September 2014