People are often incapable of articulating why they do things or how they would behave in the future.
Our behaviour as humans is influenced by many, many factors, most of which aren’t conscious or rational. Even when we do things for reasons we are not aware of or can not articulate, we are quick to explain why we did them in rational, logical terms.
Neuroscientist Michael Gazzaniga says we all have something called “the interpreter” that constantly establishes a running narrative of our actions, emotions, thoughts, and dreams. It is the glue that keeps our story unified, at least in our little brainboxes.
But it does rather highlight that the more a decision is rooted in emotion, the less useful survey data may be to explain it.
Just prior to the RDR, research made the grandiose (watch out for those!) prediction that nearly half of those using a financial adviser to pick investments will cease to do so when the upfront costs rocket on 1 January 2013, helping create an army of do-it yourself investors.
It seems like that did not happen according to another survey carried out last week which highlighted that demand for full service financial advice could be on the rise. It showed that 97 per cent of advisers have taken on new clients since the January rule changes, many of which are completely new to advice.
With the pending bank advice service closures about to create an unprecedented influx of new clients looking for advice, savvy IFAs can use their transparent status to attract new business. So not so doom and gloomy after all?
The IFA market seems to be growing and the effects of fee transparency appear to have, on the whole, been positive. But hold your horses, up crops another study showing that adviser concerns regarding covering their costs for providing on-going advice may be putting client value for money at risk.
It claims 42 per cent of advisers are worried about covering their costs but that less than 10 per cent of advisers are bothered about ensuring clients get value for money.
I think we’ll respectfully say that’s nonsense. Many firms are certainly concerned about the impact of the loss of trail on future revenue (and cost pressures are certainly the thing advisers are feeling most acutely at the moment). But very few business owners fail to recognise the importance of ensuring their service delivers value for money.
Context is required. As are appropriate methodologies and sensible (rather than sensationalist) interpretation of data.