PPI and rogue IFAs

An article in The Times newspaper today has a very valid article about spotting a rogue Independent Financial Adviser (IFA). I agree that just because your IFA has a smart office and an expensive suit, it does not mean that the advice offered will be of the same quality.

One important point the article made was regarding payment protection insurance (PPI). The article suggested that any IFA who was ethical would advise you not to buy PPI.

IFA’s can make huge commissions on the sales of PPI from High Street banks and building societies. The article highlighted how consumers who took out PPI alongside credit would be effectively be paying an interest rate of 23.4 per cent on the loan.

It said how the terms are complicated and even the most straightforward of claims will not always be paid out on.

However, what I think has been forgotten is that aside from the negative press, the mis-sold policies and rip-off premiums, PPI is actually a very good policy.

The terms are only complicated if they aren’t explained properly. And those who find that they are not eligible to claim have been mis-sold their policy.

As with buying anything, the key is to shop around and compare prices, terms and conditions. There are many specialist providers out there like BritishInsurance.com who make minimal commissions on a high quality product.

You can buy a policy online and the website is clear cut on what and who is covered. But there is also a ‘phone line available too for people wishing to speak to someone.

PPI can be the difference between being able to service your debts and not being able to.

And finally, back to the rogue IFA’s..always check that yours is recognised by the The Financial Services Authority. If not, and you have reason to complain about your IFA, you will not have recourse to appeal to the Financial Ombudsman Service.