It was interesting to see its chief executive criticise the regulator when there is still such room for improvement at his own company
How do you find a good adviser? I found myself asking this last week, after reading an article in Money Marketing about VouchedFor chief executive Adam Price, who criticised a proposed FCA directory that aims to help consumers check the status and history of people working in financial services firms.
Price made the point that the FCA’s directory “contains advisers of varying quality – from brilliant to inconsistent to completely rogue”, including those responsible for trying to con thousands of British Steel workers out of their pensions.
His view was that if the regulator cannot guarantee an adviser is reliable it should share that responsibility with businesses that perform a similar role in the private sector – companies like VouchedFor, by astonishing coincidence.
Let’s go back to basics. For many years, I have been a massive fan of many different service comparison sites out there. I have used them to find plumbers, plasterers, electricians, floor and wall tilers. I have priced delivery quotes for furniture, hired taxis and airport parking, rented hotel rooms and even bought flowers through them.
What the best sites do extremely effectively is offer a mechanism whereby satisfied (or unsatisfied) customers can share their experience of that particular service and recommend others to use it, or not.
Significantly, price is not the key determinant for choosing one trader over another. I am personally far more influenced by satisfaction ratings in respect of service than those which compete solely on costs.
Let me also say I admire the intention of sites like VouchedFor, which attempt to replicate a similar approach towards consumers seeking to find an adviser. I reviewed VouchedFor in Money Marketing around seven years ago* and said some complementary things about it at the time.
So what has changed at VouchedFor since 2011? Well, for one thing, the website is much slicker. Searching for the right adviser can be done via a greater number of filters, including not just the location of the adviser and the service you are seeking, but also on the basis of a review count and a so-called “best match” in respect of the specific advice area interested in.
All very interesting – except the algorithm used by VouchedFor also threw up some anomalies. For example, when I asked for the 10 advisers within a 20-mile radius of my postcode by number of reviews, and specified investment and savings as the area of advice I was interested in, I needed to untick a box which wanted to show me “only advisers who were verified and available” before I was matched with one 19 miles away.
Even when I unticked the box for advisers willing to travel to see me and indicated that my total assets were above £150,000, I was still presented with a list of advisers between 58 and 73 miles away, as well as one who would provide me with a phone based service as there were “not many advisers in my area who serve clients with less than £50,000 savings, investment and pensions”.
Bear in mind that my postcode places me within 15 miles of both Southampton and Bournemouth, not to mention smaller market towns within a 20-mile radius, fertile territory for many IFAs. Other search websites will happily locate scores of advisers in that same catchment area.
What this suggests is that either the software behind the algorithm was having an off day or my search skills are rubbish. Or, perhaps, the level of monthly fees paid by advisers subscribing to VouchedFor helps determine where they appear in the course of a search.
Intriguingly, given how strongly Price feels about the FCA’s own weaknesses, when I looked to see what “stringent criteria” VouchedFor uses to weed out advisers who might scam their customers, I was told it checks them against the FCA Register, including their qualifications and “fees” (presumably if they are independent or restricted).
So, not much more than the FCA directory then.
The difference, it would seem, is the fact VouchedFor also offers customer reviews. Except that, as I pointed out back in 2011: “What VouchedFor asks us to assume is that the opinion of a reviewer, potentially uninformed about what level of service he or she should expect from their IFA, is as valid as someone who knows exactly what they ought to be paying for.
“The worry is that a few fawning comments will be used as substitutes for a more in-depth analysis of what makes a good IFA.”
Based on this, VouchedFor could also include in its own list advisers whose stunningly good reviews include scores of happy former British Steel workers who subsequently discover they were scammed.
Do not get me wrong. I am not criticising VouchedFor per se. It tries to do a job and, for the most part, does it fairly well. But it ill behoves Price to have a pop at the regulator when there is still massive room for improvement at his own website.
*This article has been amended to clarify the correct date
Nic Cicutti can be contacted at firstname.lastname@example.org