In a recent Money Marketing column Paul Lewis argued that financial journalists and financial advisers are ‘one and the same’.
As my column was due, I thought I would add my two penn’orth as an adviser of 20 years’ standing.
I agree with Mr Lewis’ assertion that the two professions exist for the same reason, “to make our living explaining the complex world of finance and advising people what to do”.
Like their journalistic counterparts, the best of the financial advice community fully explain the intricacies of our proposed solutions to our clients so that they can enter into those arrangements fully informed. Consumers should beware anyone who dismisses their questions with the retort that “you don’t need to worry about that”. Such advisers have something to hide, and should be avoided at all costs.
Mr Lewis spent a good proportion of his column explaining the story behind the abolition of commission, calling it a “cancer” at the heart of advice. I agree with this; in 2007 I was one of very few advisers who responded to the initial regulator consultation into what would become the RDR. My response in a nutshell: bring it on. And my company has thrived in the new world.
But journalists, as much as they love to cling to their ideal of independence, are just as tied as the insurance company and bank advisers of old. They have to write about stuff that sells papers or generates social shares, because if the circulation of an outlet drops, so does the ad revenue. And if the papers and websites were as pure of motive as Mr Lewis would have us believe, they wouldn’t print advertorials, those thinly veiled ads that look and read like the rest of the articles.
Even the uniquely funded BBC has its own agenda: its survival in the world of Netflix and Amazon Prime means it must create content its customers want to read and watch, not necessarily what they need to. Yes, bias in journalism is unavoidable I’m afraid, Mr Lewis – the consumer always needs to apply a pinch of salt to what they read.
By far the biggest difference between Paul Lewis’ world and mine, however, is that I am on the hook indefinitely for my advice. All too often, we hear of cases found against advisers by the FOS, who have applied today’s standards to advice given decades ago.
His advice isn’t advice at all. It’s information, and hence if someone acts on his suggestions, they have no recourse if they end up being incorrect 20 years down the line. My clients know that when I create an advice report I have put my professional neck on the line, because I tell them so – it adds weight to the words contained there.
Finally, the best advisers build relationships with their clients across generations and over decades. We become trusted friends, the first person they call with a question or concern. In comparison, the words of a journalist are a puff of wind; here today gone the next.
I have a deep respect for Paul Lewis. Very few individuals have done more to further the cause of financial literacy in the UK, and he deserves all the awards he has received. But one day he’ll retire and look back at a job well done. When I retire, I’ll have to factor in the cost of run-off PI insurance.
I advise; he informs. Both advisers and journalists have their place, but they are not one and the same. I’m still trying to work out if I’m insulted by the suggestion that they are.
Pete Matthew is managing director of Jacksons Wealth