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Government should pay for campaign on IFA merits

Mel Kenny - grey

Recession and a dose of Panorama may be enough to consign poster-led bank advice to the scrapheap. Already, one major high-street bank has headed down the platform route. Does that leave the way clear for IFAs and financial planners as the sole providers of meaningful financial advice?

I am increasingly seeing some very impressive financial planning in our industry. There are many planners out there just quietly getting on with it. I see solicitors and accountants in their numbers beginning to appreciate us rather than look down their noses. But what does the general public think?

Have you looked at the growth of financial DIY? There are year-on-year increases in the number of adults that believe their knowledge is as good as that of financial advisers, with many citing the internet as an essential source of financial information. There is some very good information available on the internet but also a lot of dangerous noise.

If you ask people what they think of IFAs generally there is still a lot of negativity. The perception is of overpaid salespeople, jacks of all trades and masters of none. There is a risk the publicity on banks’ bad practice might add to the problem unless we are recognised as a different animal. Negative image can drive the clients we seek down other routes.

I believe the way to earn respect is to deliver high standards of advice using specialist skills, so the recent announcement of a major national IFA taking on ex-highstreet bank managers is not helpful. Even though most of us did come from tied backgrounds, there have been so many changes since then that the Jurassic Park banks are too far behind the curve to make a successful transition. If we are not careful, they will bring the scandal and fines with them, damaging our own profession as we try to improve it.

There are plenty of IFAs busting to put the positive message across. There is the team at IFA Promotion who do a tremendous job of profileraising – what other industry has such a tenacious promoter? But as media become increasingly personalised and fragmented, it will become more difficult to reach people without a seriously sophisticated and expensive approach. What a shame, that in our industry, Jurassic Park has the biggest budget and the loudest voice.

As the Government has interfered so much, it is about time it told everyone. If it can afford to waste money on adverts wrongfully purporting to provide free advice from the information-led Money Advice Service, it can afford to invest in reassuring the public that the bar has been raised and there are now professional standards in providing real, life-changing financial advice.

Mel Kenny is the director of Radcliffe & Newlands

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Sadly the 25 years of abysmal regulation has had its effect on the public’s perception.
    You only have to look at the blog posts on something like the Telegraph to see it. It will take a long period of the regulator being positive about our profession to change that mind set.
    It would be nice if they started….

  2. My veiw, the answer is very simple we have always battled with the majority of the general public as just being one up from a double glazing sales man.

    I fails to help when we keep getting labled as mis-selling, un-educated vagabonds by the FSA which fails to fill the consumer with confidence.

    They strut aroud like Wyatt Earp on a mission to clean up tombstone.

    Why oh why do they keep calling us an industry and spout on about professionalisum ?

    They also what us to be as

  3. Ah! What is that I see? Nothing but a pig flying past my window! How do you spell hallucinating?

  4. Well I have to say that I don’t encounter that much negativity. And Mel I think you are spot on – I’d even contribute!

    The RDR has put true IFAs on a pedestal and as such it is the least they can do to explain to those still not in the know that there is a very big difference between an IFA and all the rest – now and after RDR in particular.

  5. Mel & Harry – What we need to remember is that the MAS is funded by US and not by government. If we take Mel’s suggestion that the Government Funds telling people that they need advice, I think there is more chance of a pig flying backwards, BUT bearing in mind the FSAs drive through the RDR has been so that affluent clients do not pay for poorer clients advice, it needs to be remembered it is those who seek Independant Advice who will be paying for those who obtain Generic Advice/information trhough the MAS. If IFAs were allowed to “opt out” of the MAS by directing teh same amount to IFAPromotions for teh promotion and education fo those wanting and seeking advice, I think that is an argument we might be able to win.
    That way it would be those seeking advice, funding those who need to know the value of advice, who then take advice and in turn fund more people seeking advice.
    This is the reverse of how MAS may work which could be to discourage True Independant Impartial advice where it is needed in favour of self help via a website or call centre.
    So Mel is thinking along interesting lines and I appreciate him writing the article, but teh great thing about Blogs is being able to move an idea forward or expand on it until we find something which may work.
    Thanks Mel.
    Just a thought….

  6. Remember the milk marketing board – ‘milk – brilliant’.

    Maybe all the fragmented IFA bodies should get together and fund a marketing campaign extolling the virtues of independent advice.

  7. Julian Stevens 7th July 2011 at 10:41 am

    The government won’t fund anything that can be charged to the industry via the FSA.

  8. Does any reader seriously believe that the FSA, Treasury or Government actually care whether consumers receive ‘independent’ advice?

    The seeds were sown when some fool determined that de-polarisation would assist consumers. We all know that it served to muddy the waters allowing multi-ties to feign independence by nurturing concepts such as “best of breed”.

    When I met with Mark Hoban in 2009 I asked him a straight-forward question. Do you believe that independent financial advice is the best route for consumers?

    He replied, “I believe in top quality financial advice”. He would not or could not bring himself to support the IFA cause, even in theory.

    Look back at DP07/1 where the FSA suggested that any plan is better than no plan. Whilst this is a general truth it highlights the crazed thinking behind the diminution of the IFA brand.

  9. No, no, no!

    There is no situation so bad that Government involvement can’t make worse; any client who thought thinks a government sponsored/boosted sector is one with credibility is exactly the sort of client I can do without.

    It’s to our credit that we get no support from this or any other Government – it proves we are doing it right!

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