That advisers are undervalued will come as no surprise to readers and this concerning trend is only likely to increase in the age of the dangerous fools.
The fool comes in many forms but all share a few common features: they over-simplify complex concepts, make reckless assumptions and devalue proper advice.
Robo-advisers are the first example of dangerous foolishness. I accept there can be great value in supporting conventional advice with automated solutions. However, most systems I have seen are simply modern versions of conventional decision-tree product pushing. Providers have something to sell and the robo guides towards a solution. Granted, some are more sophisticated than others, but none are advice.
In a post-truth world, facts become increasingly irrelevant. I have written in these pages before about how those who claim to be “expert” are conflicted with their human failings and their judgement may be flawed.
Two years into pension freedoms and, due to a clash of several complementary factors, the topic of final salary pension transfers is now regularly featured in the mainstream media.
Time and again the same “experts” are wheeled out, decrying the conventional wisdom that it is not in most people’s best interest to transfer from these schemes. Notably, these experts are usually not advisers, have never given advice and will not be affected by the inevitable fallout.
I recently attended a roadshow targeted at individuals with benefits in these schemes. A layperson would likely have come away from the event believing they had to cash in their pension to avoid losing out due to “high” transfer values.
It was stated individuals should seek advice but more prominence was in fact given to advisers standing in the way of liberating this money, or the fees we charge.
I am not saying the individuals thinking of cashing in their pensions are foolish, but the fools spurring them on should know better. The panel made gross generalisations and used invalid assumptions. One had based their assumption on inflation being 2 per cent; another on longevity to 85 and returns of up to 8 per cent.
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An adviser would be more balanced. Transfer values are not “high”, they should be fair value. A combination of low gilt yields, low anticipated returns and an expectation that inflation will be higher for longer has led to the increases.
But even if people go on to seek advice, they cannot un-remember the seeds sown by these dangerous fools. Social media perpetuates it further, with loud messages invariably given the most weight. When a Waspi supporter declared that life expectancy for a 65-year-old was eight years, they received 20 times the retweets of the actuary correcting them on such nonsense.
The media is guilty too, with articles accentuating the benefits of strategies that meet their preconceptions of their demographics but rarely highlight the disadvantages. Or they are overly negative, paying little attention to the benefits. They are competing for a shrinking audience and balance is hard to find.
There will always be a need for advice. Advisers are uniquely well placed to simplify the complex, save people from their human behavioural biases and avoid the risks of herd mentality.
On many occasions we will struggle to shout louder than the fools but that does not mean we should not try.
Alistair Cunningham is a chartered financial planner at Wingate Financial Planning
He will be joining us at Money Marketing Interactive as a speaker on May 18th