As a new survey reveals that most UK adults take their financial advice from media experts such as Paul Lewis and Martin Lewis, brokers react to a trend that could lead to borrowers making ‘terrible financial decisions’.
In the past few months, the Lewises, Radio 4’s Paul and Money Saving Expert’s Martin have come under fire from brokers for their comments on the mortgage market.
At the height of the mini Budget blues in October last year, the ubiquitous Martin Lewis was criticised by advisers for telling his TV audience to stick with standard variable rate mortgages.
Meanwhile, Paul Lewis, the presenter of Radio 4’s Money Box was berated for somewhat flippant remarks he made in an interview with the i newspaper.
At the time Lewis said: “The way to get the best possible deal is to go to one of the big, national, independent mortgage brokers – don’t find a mortgage broker over the local cab shop in the high street.”
Brokers, especially independent ones (who perhaps work over a local cabbie), reacted angrily and Paul Lewis subsequently apologised, clarifying that he ‘had to give general rules’.
Customers turning to TV for advice
However, while some may brush these off as isolated incidents, the fact is that a large proportion of the UK population get their advice from pundits and journalists such as the Lewises.
A recent survey from wealth manager Quilter suggests that most UK adults turn to online and TV experts when it comes to planning their financial futures.
More than a third (35 per cent) said they use this source when managing their finances, followed by comparison sites (30 per cent) and family members (29 per cent).
And brokers and advisers feel that this trend towards unregulated and ‘blanket’ advice could lead to clients making ‘terrible financial decisions’.
The media is not gospel
Several brokers who spoke to Mortgage Solutions were shocked by the survey findings.
Benjamin Blyth, director at Houz Mortgages said: “It’s worrying that such a high percentage of financial decisions are influenced by unqualified TV ‘experts’.”
And Amit Patel, adviser at Trinity Finance, was disturbed that nearly a third of the population could be choosing financial products that weren’t right for them.
He said: “Potentially 35 per cent of the people surveyed could have opted for a product that is not suitable simply because they have taken as gospel what they have read or heard in the media from people who do not hold the relevant qualification to advise in the first place. That is 35 per cent too many.”
Lewis lips sink ships
The fact that many media pundits don’t hold the correct qualifications to give advice was picked up by a number of advisers.
Mike Staton, director at Staton Mortgages said: “The public need to be educated that Martin and Paul are journalists, not qualified or regulated financial advisers, and that if they want to follow their advice then they do so at their own risk.”
Jamie Lennox, director at Dimora Mortgages, agreed with that assessment.
He said: “Naturally, people are led by the information they consume by the so-called ‘industry experts’ as they are given the platform to reach millions of people week in, week out.
“However, there is a real concern when they discuss highly regulated industries such as mortgages as they more often than not don’t hold the required qualifications on the subject area.”
Blanket advice
Often, it is the general nature of advice from media pundits that troubles qualified advisers as major financial decisions, particularly mortgages, need granular details on individual circumstances.
Jamie Lennox, director at Dimora Mortgages said: “We’ve too often seen blanket advice given on TV to consumers that could lead to some terrible financial decisions being made.”
Kylie-Ann Gatecliffe, director at KAG Financial feels that much of the advice given on TV should be taken “with a pinch of salt”.
She said: “Their discussions are normally very broad and as advisers we know that not every client fits into the same box, in fact now more than ever each client is very different.”
Wealth warnings needed
The lack of qualifications and the broad-brush advice has led a number of advisers to question whether the shows and various media forums need to come with some kind of ‘wealth warning’.
Lewis Shaw, owner and mortgage broker at Riverside Mortgages, said: “I think any show that talks about financial matters should have a disclaimer that says something akin to ‘the presenters on this show are journalists and not qualified to give financial advice. If you require financial advice, you should seek professional advice from a qualified expert’.”
‘With great power, comes great responsibility’
However, despite the concern over the qualifications that pundits may have, the majority of brokers and advisers feel that financial journalists such as Paul and Martin do a decent job in educating the public on complex financial matters but they just need to rein in the actual advice.
Craig Fish director at Lodestone Mortgages & Protection said: “There is no doubt that both Martin and Paul mean well when speaking in public, but they need to be very careful with the words they use. They should be acutely aware of the impact of their words on the public.”
Rhys Schofield, managing director at Peak Money said: “The Lewises generally do a fantastic job in my opinion but they really just need to caveat what they say with, ‘go on Google, search for ‘best mortgage advisers near me’ and pick up the phone to whoever has the best reviews’.”
And the final word on the subject, somewhat surprisingly, comes from the pages of Marvel Comics as Scott Taylor-Barr, financial adviser at Carl Summers Financial Services issues a warning to the TV pundits.
He said: “Of course, there is always a place for excellent quality financial journalism, many people find the subject daunting and having easy access to a source of information is always going to be valued.
“However, that means these individuals end up in a powerful position with a wide-reaching platform and can potentially impact markets, but without the regulatory oversight that advisers have. At the risk of quoting from Spider-Man: ‘With great power, comes great responsibility’.”
