We don’t engender trust by talking about it. We create and maintain trust by doing “stuff”. Primarily we trust people who do what it is they say that they are going to do. Trust is a valuable commodity that can take a long time to acquire and a very short time to lose. I think that those who seek to comment on the subject need to understand some fundamental points about why the IFA is actually a trusted adviser.
First of all suggesting that the final services industry is some kind of homogenous group of people sounds to me like some kind of “ism” (just like suggesting all men or women behave the same = sexism, or all people of a particular race behave in the same way = racism). We could probably create a new word. Let’s call it “adviserism”. Commentators like Sue Lewis of the FCA Consumer Panel fall into this trap on a regular basis.
When people claim that consumers don’t trust advisers they are demonstrating adviserism. There are more variations of advisers than you can safely shake a stick at. As other contributors to the recent thread have pointed out, to suggest that advisers are not trusted massively misses the point. Just about every IFA firm and individual that I know has a client base made up of people who absolutely trust the advice and service that they receive from their adviser.
The vast majority have also done exactly what has been asked of them by successive regulatory regimes. They have gone to heroic lengths to ensure that the advice they have delivered and the products they have recommended are absolutely suitable for their clients. They have avoided like the plague the opaque and unsuitable products and funds that represent the well reported mis-selling.
Further, they have strived valiantly to achieve the qualifications required of them and to maintain a robust and effective continuous professional development regime. They have dealt with a constant flood of regulatory rules and guidance and gone to great lengths to interpret those rules in favour of their clients.
They have successfully engineered a move away from commission-based sales to transparent adviser charging even though a large number saw such a move as less than positive. I am astonished that the so-called “advice gap” hasn’t been blamed on the adviser community yet but suspect it will be soon.
Advisers have put up with steadily increasing regulatory costs with little or no credit for the fact that they have funded the FSCS to compensate consumers disadvantaged by those advisers who didn’t buy into the points above. They have funded the MAS despite the disingenuous tagline “established by Government” and now they are going to be asked to fund the next political adventure, the ridiculous “guidance guarantee”.
All the while they have had to put up with a constant “noise” from people claiming that advisers are not trustworthy.
I wonder if the likes of Sue Lewis have any idea how insulting she is when she engages in her “adviserism” attacks.
If trust has been destroyed then the blame lies primarily with a 28 year old broken regulatory regime that has patently failed to serve the consumer well. Someone asked me the other day for some words to describe the UK financial services regulatory world, I answered with 4 words: expensive, ineffective, amateurish and mushrooming.
I absolutely support the need for a robust and cost effective regulatory regime to help protect the UK consumer. The problem is we don’t have one.
Independent financial advisers are key to creating trust amongst the UK financial consumer we are just badly let down by a small minority who simply don’t care and people in pseudo regulatory roles spouting on when they should know better.
Nick Bamford is executive director at Informed Choice