Yet most people making financial decisions are not equipped with the specialist knowledge they need. Nor can they always tell when what they have bought into it is not performing as it should be – or how to react if this is the case. This means many customers depend on financial services institutions for reliable advice.
But it is all too easy for the trust to go and the relationship to falter. We are increas-ingly concerned by the evidence that consumers do not feel they can trust financial profess-ionals. Aifa is proud of the positive relationships between advisers and consumers but feel there are steps which must be taken to help rebuild the trust that has been lost.
That is why, as part of our ongoing work on the RDR, we published a consumer trust document last month, Consumer Trust in Financial Services. We looked at why consumers are being put off engaging with retail financial services and what would encourage them to re-engage. Consumers told us they want to know who they can trust. They need to know who is on their side and who wants to sell them a product.
Getting a clear distinction between sales and advice is fundamental and we believe it would dramatically boost consumer confidence in our industry.
We need to replenish that lost trust for consumers’ own financial wellbeing and for a healthy and growing market.
The key messages are and always have been ones of simplicity and trust. More consumers will be better served if they know who to trust and firms will have the confidence to invest in business models that deliver transparently on the promises made rather than needing to over-promise or mislead consumers into action.
Our research reveals that 74 per cent of adults agreed that making consumers aware of whether they are being sold to or advised was a good idea – with only 5 per cent disagreeing. We also found that when considering buying a product, 60 per cent of people would be likely to buy with “product information” only and crucially, to take responsibility for that decision. W are not arguing for the abolition of sales, far from it. My favourite metaphor for the sale and advice approaches are that they are two sides of the same coin. We need both to offer people freedom of choice, but we also need clear blue water between the two.
The starting point for resolving the trust issue will be to listen to the message consumers are sending us about what they really need – clarity.
Tracy Elwick is director of public relations & marketing at Aifa