The financial planning industry can play a key role in influencing public perception of the profession as a whole but some consumer groups, either intentionally or unintentionally, help to distort public perception of the advice community.
Part of the Personal Finance Society’s consumer confidence campaign aims to engage with groups that have a direct influence over consumer attitudes, calling upon them to recognise the significant changes that have been put in place over the past two decades. This, coupled with the evidence available, provides a compelling argument for the value and importance that advice can play for the majority of UK consumers.
While there is a growing trend and development of execution-only sites, the need for qualified financial advice is also on the rise. There is a logical trend towards utilising technology for research and self-selection, which for some people should be relatively straightforward in meeting identifiable needs.
Consumers in general, however, would not have the wider knowledge and understanding of tax implications to conduct a proper financial review, which should always be entrusted to an appropriately qualified professional. Self-select might seem like an easier or cheaper option in the short-term, but the long-term cost of getting it wrong could be significant.
The advice sector has two decades of negatively reported baggage to discharge and we need to use the introduction of the retail distribution review as the point at which we can draw a line in the sand to demonstrate why the sector has evolved in to a permanent profession that the public can have confidence and trust in.
Influencing others to take a more balanced view in their reporting is a key objective as part of the wider campaign to increase consumer confidence and trust. It is equally important to stress the benefits and protection afforded by authorised financial advisers. Not least because of their knowledge and expertis their ongoing commitment to continuing professional development and requirement to hold a statement of professional standing; but all are required to hold professional ndemnity insurance and contribute to the Financial Services Compensation Scheme for the protection of the clients they serve.
The value of advice should not be measured by its initial cost but by the significant long-term value and protection that the majority will benefit from. The more organisations within the industry that contribute to help influence others regarding the value of advice, the sooner we will be able to move on to an era that should require less intrusive and costly regulation.
In light of our negative baggage – much of which has little relevance to the way in which financial advice is delivered today – engaging and educating consumers will be imperative in helping deliver better consumer outcomes to more consumers.
The recent PPI misselling scandal has had little to do with the advice profession, but the average consumer would not necessarily be able to differentiate this fact given that retail financial services is a reasonably blurred and confusing landscape for the less informed onlooker.
It is time to unite in professionalism to influence the future perception and confidence in our profession.
Keith Richards is chief executive of the Personal Finance Society