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As lawyers, accountants and surveyors would argue, building a profession does not happen overnight. It takes years of hard work raising standards and demonstrating these standards before anyone can truly count themselves as part of a profession in the eyes of the general public.
I read with interest the recent article on Adviser Lounge by the financial journalist David Prosser, in which he made a number of salient points on how IFAs are perceived. However, I do feel the problem with adviser reputation is more complex than the article would let us believe.
Yes, a lack of trust in financial advisers has dogged the community for years and in some cases, rightly so – there are failings in all professions. But let’s not forget that we have now seen 25 years of regulation in the advisory space, culminating in the RDR, and the way advice is delivered has changed significantly during this time. Aspects of driven regulatory change over the past two decades have understandably frustrated many, but it is time to put the past behind us, including the baggage of past mis-selling scandals.
I agree with David that the RDR is an opportunity for the financial planning sector to demonstrate to the public its professionalism, as much through cultural behaviour as through higher professional standards and greater transparency.
Individual advisers have often argued that they don’t have a problem with client confidence and trust. I think it is fair to say that consumers who receive advice, do trust their adviser, but probably don’t trust the profession their adviser represents. They almost certainly believe that they are lucky to have one of the good advisers, but wouldn’t necessarily trust others because of the general negative perception which is evidenced through surveys and intrusive regulation. The bigger issue however, is for those consumers who would benefit from advice but because they have never engaged with a well qualified professional adviser, lack confidence and trust to engage due to negative perception.
Demonstrating higher levels of professionalism in the way we interact and communicate is the linchpin of the Personal Finance Society’s Consumer Confidence Campaign launched earlier this year – the first stage of which is to raise awareness of the need to unite the financial planning community before engaging with the public directly.
Let’s face it; some of the most prolific adviser bloggers are not doing themselves or their peers any favours. In a moment of frustration or because they are carrying too much negative baggage, they may well type an angry, unprofessional comment under an article on a trade website and sadly the majority get tarred with the same negative brush. Many authors of negative or critical blogs generally hide under an anonymous or pseudonym post, almost certainly too ashamed or cowardly to be associated with their own views.
Unlike David, the majority of advisers I have interacted with over the years have been professional, ethical and passionate about their role but it is the minority that continue to tarnish the perception of the majority. The promotion of market failings rarely provide any degree of proportion and therefore issues which may only affect 2-3% of consumers, carry the perception that the majority are impacted. Our own self reputational damage is of course something we can control. Consumers only have to type ‘financial adviser’ into Google and the trade news sites appear. As with the well publicised risks associated with facebook, we need everyone to be responsible about what they post for the whole of the world wide web to view. If someone wants to have a view, good or bad, at least put their real name and company to it – otherwise they have no view!
Negative and unprofessional content viewed by external audiences has an impact – not to mention the damage done to the reputation of the industry through the display of fragmentation and in-fighting. Our aim here is not to muzzle freedom of speech; quite the opposite.
Our campaign is calling for the silent majority of exceptional financial advisers to speak out and get their voices heard, to balance the debate and project a true reflection of modern financial advice to the world. After all, engaging in debates in a public arena is a useful way to reach out to those who might never have previously considered financial advice, cultivating relationships and demonstrating ‘best practice’.
The campaign has had a promising start with a large number of advisory firms – together with many others associated with financial advice – backing the call for unity. It’s important that a solid foundation of cooperation is laid first onto which we can build up our profession and, ultimately, foster greater consumer confidence in financial advice.
More work is needed by the Government, the Regulator and the industry to ensure that the provision of financial advice in the UK is fit for purpose and does not result in fewer people having access. But research from unbiased.co.uk and Standard Life last year found that people who receive financial advice are usually much better off than those who don’t (The Value of Advice Report). So striving to demolish any barriers that a negative perception of financial advice has created, is not only in the interest of our profession, it’s ultimately in the public’s best interest.
If anyone would like to support the Consumer Confidence Campaign and to use the industry generic logo to demonstrate support of a united profession, please visit The PFS