If you ask me, people don't want to listen to advice

If you ask me, people don't want to listen to advice

It is a fairly rare person who voluntarily seeks out advice on, and then buys, life insurance or a pension. Hence the truism 'insurance is sold, never bought'. That's why I think plans for a nationwide network of centres to provide generic financial advice, as recommended by insurance company chief Otto Thoresen last week, are deeply flawed.

Last year the government asked him to look into the provision of generic financial advice, and the Treasury has agreed to put £12m towards a pilot scheme based on his report. It will test a number of ways to 'engage interest', including the net, the (already stretched) Citizens' Advice and other advisory charities, and face-to-face advice in the workplace.

While no doubt well-meaning, Thoresen's review has made an assumption that undermines all its recommendations: that people are sufficiently interested.

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After 20 years of writing about personal finance, talking to consumers and product providers, I have no doubt this assumption is wrong. Most people do not seek financial advice unless they absolutely have to - usually when they are in trouble. Those who do seek advice at an earlier stage want to have their hand held all the way when it comes to making financial decisions. It's no good abandoning them at the last hurdle. Even Thoresen describes this part as a 'challenge', but blithely adds that 'everybody is pretty well a purchaser from the financial services industry' and that if they know there is somewhere they can get advice to improve the value of their purchases, they will take advantage of it.

I don't think so. Generic advice will be next to useless for the really vulnerable people the government wants to target.

Last week I took out a mobile-phone contract which included a 'free' phone normally costing about £200. For that reason, I was advised to buy mobile-phone insurance costing £19.95 for three months' cover. I was dubious, but with a 14-day cooling off period to let me check the terms and conditions, I agreed.

Closer inspection of the policy showed it was underwritten by Norwich Union: odd, as the insurer is quoted opposite as saying that mobiles are covered by contents policies within the home, and by additional personal belongings cover outside. A spokeswoman told me: 'Think carefully about whether you need separate mobile insurance, or if you are already covered.'

Closer inspection of the policy revealed numerous exclusions, including: 'We will also not cover costs of repairing or replacing your phone if the damage is covered by the manufacturer's guarantee.'

Mobile-phone insurance does cover the cost of calls made after a phone has been lost or stolen, unlike home contents policies or the manufacturer's guarantee. But you can set up a Pin number to lock the phone, and also ask your network to block foreign calls, as these tend to rack up huge bills if your phone falls into the wrong hands.

The insurance policy is now in the bin.

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