Why have we as an industry got it in for the Consumers' Association? I was at a meeting of compliance officers recently and someone suggested arranging a speaker from the CA for a future event.
“They should be paid danger money”, “they will need to bring tin hats” were the tone of the comments made (we compliance officers can be such wags). I cautiously raised my hand and commented that I would mostly be on the CA's side. I think most people were too shocked to comment.
I have always been somewhat confused by people's antipathy towards the CA. The CA is there to help, educate and champion the cause of the consumer and I feel it does a very good job on the whole. If we as an industry are at the thick end of its attacks sometimes (or even often), we probably deserve it. Maybe I now need my own tin hat. Do not get me wrong – I do not agree with everything the CA says or does. There are always exceptions. It makes mistakes, too.
The hottest topic in this field at the moment is, of course, misselling of endowments. Many firms have had the standard letters of complaint generated from the CA's website. The site explains very clearly when consumers do and do not have a valid claim and provides them with the mechanism to make the complaint.
Many IFAs have clients who have been missold policies by other advisers and have helped them out as a result.
The CA is only doing the same thing but on a much bigger scale. It is entirely laudable for it to educate consumers about the situation and help them if there has been misselling. Of course, there will always be some consumers who misuse the website and make an unjustified complaint but this is hardly the CA's fault.
I suspect that most of our adverse views arise out of the headlines that the CA generates. The CA – and Sheila McKechnie in particular – are often outspoken and hence get reported in the press. In the realpolitik of the media world, it is usually necessary to adopt this approach to appear in the news. These headlines tend to be sensationalist.
Fiona Price suffered from this difference recently when the headline to her comments gave entirely the wrong impression of her views and led to angry responses and even hate mail.
Clearly, headlines can never provide the full picture. They are not expected to. But they raise interest and the detail follows. The detail of what the CA produces, in particular, the articles in Which? magazine, are almost always well written and very balanced.
They adopt similarly robust research principles in their assessment of financial products as they do with washing machines and irons. They also ensure many of their articles are commented upon by practising IFAs (and amended if necessary) before publication.
This results in articles which go a long way in educating people about their finances and this benefits us directly. Clearly, consumers who are more educated about their need for income protection, saving for retirement, etc, are more likely to go and see an IFA.
There are other areas where the CA has directly helped the IFA. It almost invariably recommends that consumers see an IFA as opposed to using any other option. In addition, it has campaigned extensively (albeit unsuccessfully) to maintain polarisation.
My final point is this. As well as seeing the positive things that the CA does for us, I think we should also accept the negative comment and continue to improve what we do. It is only human to be unwilling to accept criticism – I am too prone to this myself. But this is an unhealthy response. There is usually something good to be learnt from criticism.
It is particularly important for us to learn from the CA's criticism. This is because it speaks on behalf of consumers – our clients (or potential clients).
I recently read that 89 per cent of upheld complaints are against tied advisers but I think it would be missing the point if IFAs were to claim that “it was not us”.
We should never miss an opportunity to learn how we can provide a better service to our clients and consumers generally.
Rory Percival is compliance director at Fiona Price & Partners