Cicutti: IFA review services must offer a range of views
Years ago, I was asked to write a guide on how to find the right financial adviser. After explaining what IFAs do for a living - and no, I didn’t say they are all greedy, commission-hungry, foot-in-the-door salesmen - I then had to suggest a means of finding the right adviser.
Like most journalists who write on this issue, I paid appropriate lip service to IFA Promotion’s then newly launched online search system, plus one or two trade body websites.
One of the key ways, I told readers, was to ask friends and family for a recommendation. People you know and share a common set of interests with are the ones most likely to suggest someone you can trust and get on with.
I have never regretted making that suggestion and I know that many advisers believe personal recommendation is one of the best sources of new clients for their services.
So I was interested to read in Money Marketing last week about a new service for IFAs called VouchedFor, which aims to help people find advisers near to them, based on individual recommendations from their clients.
On the face of it, the idea makes sense. People are already able to find all sorts of other services, from hotels and restaurants to plumbers and plasterers, using the same type of search system.
Each one involves specifying the service one wants, keying a postcode into a box where necessary and looking to see who is there and what their reviews are.
Through a one such website I found a superb plumber who was able to sort out a long-running issue with a leaky shower that had defeated several other “professionals” who had come, taken a look and left - but not before charging me large sums of money without solving the problem.
Nothing wrong with the concept, then. Even so, it is worth noting that, unlike finding a tradesman to do a single job for you, looking for an IFA involves a search for someone you hope you will be able to enter into a long-term relationship with and who may have a profound effect on your future lifestyle for decades to come.
But in the absence of any other system for finding an adviser, another service that offers references is better than nothing, so what can one say about VouchedFor?
One of the strengths of the site is it provides an explanation of what independent financial advice is and gives people an idea of what they should be looking for.
But it gives less information and guidance to newbies as to what they should be looking for than the Unbiased.co.uk site - for example, what to expect and what questions to ask an adviser. Maybe there is a different demographic involved in terms of the potential market each site is targeting.
In addition, while I like the idea of people being able to access other people’s views when searching for an IFA, I am left wondering about the quality of some current recommendations.
In my own case, a postcode search revealed a range of advisers, several of whom had reviews from clients, some of whom had been with their IFAs for up to 20 years. The website allows for newly subscribing IFAs to provide three existing clients as references, so many of the current reviews on the site have not come from customers using the site as it only went live in May.
In normal circumstances, VouchedFor’s system requires a client to make contact with the adviser through the site and have a first meeting before they can review him or her.
That is OK but it does leave it open to accusations that, as the IFA can see where the introduction has come from, clients may get preferential advice and may lack the mystery shopper element that sites such as tripadvisor does with hotels and restaurants. Nor does it ask tough questions of the adviser, such as how they deliver that service or what they charge.
VouchedFor asks us to assume is that the opinion of a reviewer, potentially uninformed about what level of service he or she should expect from their IFA, is as valid as someone who knows exactly what they ought to be paying for.
The worry is that a few comments will be used as substitutes for a more in-depth analysis of what makes a good IFA.
My fears are raised even further by VouchedFor’s charging structure, whereby an IFA pays an extra sum if a prospective client sat down in front of the adviser at a meeting.
An IFA review service should either quiz prospective IFAs far harder about what they do for their clients or contact a random selection of clients and ask them to give their feedback about their adviser.
We need a service where people can say all sorts of things - nasty as well as nice - about individual IFAs they come into contact with.
Nic Cicutti can be contacted at email@example.com