A new consumer group report has shown worrying gaps in bank staff’s knowledge about ISA
products, and indicated that this means they are giving “shockingly poor” advice to some customers.
The survey by Which? was compiled from the results of telephone enquiries made to 13 of the main
providers of ISA accounts. They said that out of the 104 calls they made during the mystery shopper
exercise, there were only THREE calls in which they received correct answers to the four simple
questions they asked.
The study showed that 97 per cent of bank advisers gave incorrect or conflicting advice about the
amount a customer could transfer from one ISA to another. 43 per cent appeared to be unaware
that you could transfer money from a cash ISA to a stocks and shares ISA investment.
90 per cent of providers successfully gave details of how to transfer their ISA … however only 57 per
cent gave correct advice regarding part transfers, where the customer wishes to leave part of their
investment with the current provider. One adviser told the mystery shopper that the larger the ISA
balance, the longer it would take to transfer the funds.
Due to the tax-free status of ISAs, it is important that savers receive correct information and advice
about their transfer options – as following incorrect procedures can result in the investment losing
its tax-free benefits.
Chief Executive of Which?, Peter Vicary-Smith, said: “We were genuinely shocked by this ISA
investigation. Cash ISA transfer rules aren’t that complicated and cash ISAs have been around since
1999 – surely 12 years is long enough to learn the rules?”
Of the companies contacted, Nationwide, Barclays and Yorkshire Building Society advisers
performed best. The worst advice was given by advisers at HSBC and Royal Bank of Scotland.
A spokesman for HSBC responded: “Although the research was based on a tiny sample of eight
phone calls, we are still disappointed that the correct information was not given. We will certainly be
taking the opportunity to remind colleagues of the correct procedures involved.”
