Consumer watchdog criticises advice on stakeholder pensions

Some of Britain's biggest banks have been criticised for failing to give adequate advice on the sale of stakeholder pensions in a report published today by the consumer magazine Which?

NatWest, part of Royal Bank of Scotland, and Barclays were singled out for their shortcomings by undercover investigators from the magazine who visited 12 banks and building societies to ask about the low-cost pensions.

The investigators who visited two NatWest branches received "very poor" advice, where the advisers seemed "confused" and did not recommend a stakeholder pension despite this being the most appropriate option, the report said.

Barclays is censured because, despite saying that it offers customers advice, it only took the investigators through a standard decision tree which does not take account of issues such as individuals' attitude to risk.

Halifax, now part of HBOS, was also criticised for not taking the individual through the full range of available funds.

Which? said the most detailed advice came from independent financial advisers, who spent time assessing the investigators' attitude to risk and explaining the choice of funds available.

It also praised some of the life offices which offer stakeholders such as Standard Life. But it said that despite the promise from life offices that they offer advice, getting past the call centre to gain access to an actual adviser was very difficult.

NatWest rebuffed the findings. The bank said: "We believe stakeholder products are not always the best product when planning for retirement."

However, the report will raise fears about the process of depolarisation which is currently being driven through by the Financial Services Authority.