Consumers feel confused and daunted by the prospect of comparing products, when shopping around for mortgages and personal pensions, according to a new survey published this week by the retail industry watchdog Consumer Choice*.
Consumers were asked for their detailed impressions and experiences of 45 consumer product sectors, including electronics, white goods, utilities, and financial services.
In a ranking of the 45 sectors, consumers listed mortgages as a product where it was extremely difficult to compare prices (ranking: 9th from bottom) and where they perceived there was an extremely limited choice of products available (ranking: bottom of list).
The inability to compare mortgage deals highlights the need for guidance by an independent financial adviser capable of taking a ‘whole of market’ approach when providing mortgage advice, and providing precise calculations of monthly mortgage repayments.
The perception that the choice of mortgages available is limited may be a consequence of taking ‘tied’ financial advice from one of the high street lenders, who inform customers only about their own in-house product range. In reality, the mortgages market offers many hundreds of mortgage deals, from a wide range of suppliers.
While tied financial advisers have on average only 20 of these products in their range, independent financial advisers can access the whole range of mortgages on the market,  to locate the best deal for their client.**
Pension advice needed
Personal pension plans came second from bottom out of 45 products on ease of comparing price, and 7th from bottom for choice, the survey revealed.
“Perhaps consumers find differentiating between supplier’s offerings in these markets difficult, or perceive that there is a certain ‘sameness’ about pension suppliers in the market – that ‘there’s not much to choose between them’â€, said Consumer Choice in relation to both home mortgages and private pensions.
The other goods and services that came in the bottom 9 for ease of price comparison were home maintenance services, veterinary services, personal banking, vehicle repairs, fixed line telephone services, gas/electricity, and professional services.
*Source: “2009 Consumer Conditions Survey†of 5,862 British adults by Ipsos Mori on behalf of Consumer Focus, published December 2009. Research carried out in March/April 2009
** Source: report “The Value of Mortgage Adviceâ€, Association of Mortgage Advisers, 2009
