Money Advice Service chief executive Caroline Rookes came under fire last week for raising concerns about the ethics of advisers during the Labour conference in Manchester.
In a discussion on the Budget pension reforms, some concerns were raised about whether there were enough regulated advisers to cope with the extra demand and whether they were of sufficient quality.
Rookes agreed that more regulated financial advice would be needed and the MAS would signpost retirees to advisers through its directory.
During this discussion, Rookes was asked a direct question by a member of the audience. He said: “Caroline… if you say there is a need for more regulated financial advice then I guess you are not concerned about the number of advisers or their ethics?”
After more conversation, Rookes addressed the questioner directly. She said: “Am I concerned about the ethics of regulated advisers? Personally, yes. But I know they are regulated and nothing will change that. If anything the FCA will be tougher on them to ensure they are doing what they should.”
Advisers were furious. The comments were branded “bizarre and offensive” as many felt they tarred the entire industry with low ethical standards.
The Personal Finance Society wrote to MAS insisting that Rookes choose her words carefully instead of making such sweeping comments about a profession that has worked hard to raise standards.
In response, Rookes has sought to repair the damage by reassuring adviser trade bodies such as Apfa that MAS is happy to work with them.
But she also gave people the false impression that the remarks were not accurate or a fair reflection of the discussion. This is wrong.
For example, in a letter to the PFS the MAS said: “We are very disappointed that Caroline’s comments during a fringe meeting at a Labour Party conference have been misrepresented as an attack on the ethics of advisers and would like to apologise if this has caused offence to advisers.”
Advisers can make their own mind up about whether the remarks are an attack on advisers or if that is a real apology, but the words are absolutely not “misrepresented”.
Nor are they misquoted, misreported or taken out of context. They are a fair and accurate report on an exchange during a debate on pensions and, of course, Money Marketing has the conversation recorded alongside extensive notes.
Nobody from the MAS has contacted Money Marketing to complain. To be crystal clear: MAS has explicitly told Money Marketing the article is fair, accurate and it has no problem with the reporting.
Today, the MAS sent Money Marketing a further statement where it backtracks on claiming the words were “misrepresented” and does not apologise.
It states: “Caroline did not intend to imply that advisers’ ethics are questionable. She was agreeing with another participant at the event that all advisers need to operate ethically to ensure the highest standards so that customers can consistently get the best outcome.
“We want to ensure that consumers get the best possible advice, including from regulated advisers where appropriate. That is why we are developing a new directory of retirement advisers so that customers can be signposted to high-quality regulated advice to meet their needs.”
Advisers have a right to know what the head of a major adviser and industry-funded organisation is saying about them in public forums, especially among influential politicians and senior industry figures.
Rookes clearly has concerns about adviser ethics. This is perfectly legitimate but she must elaborate and explain her concerns so they can be addressed.
Instead, because of the backlash, she has made a half-hearted retraction and tried to muddy the waters by claiming her words have been misrepresented.
This is wrong. It is an underhand and unjustifiable slur on the integrity of Money Marketing and myself as a journalist.
The advice profession is rightly furious about Rookes’ comments and she should take responsibility instead of trying to weasel out of her own words.
Samuel Dale is political reporter at Money Marketing – you can follow him on Twitter here