Advice and sales division is the key to trust: Aifa

Consumer trust in financial services institutions could be dramatically increased if a clearer demarcation between sales and advice existed, research from the Association of IFAs has revealed.

Conducted among 2,451 adults, the report finds 81 per cent of those surveyed said knowing whether a product was being sold or advised was important to building trust levels in building societies, banks and IFAs.

In a thumbs up for advisers, the research revealed 80 per cent of respondents who took out a product in the past three years with an IFA said they were confident personal circumstances had been taken into account. This compared with only six out of 10 stating banks had done the same.

Of those polled, 86 per cent who had had dealings with IFAs in the past three years rated service as fairly good or extremely good. Just more than three-quarters, or 78 per cent, trusted IFAs to treat them fairly, while this figure fell to 73 per cent for banks.

Just more than one in 10, or 12 per cent, of consumers attributed their lack of engagement with the financial services industry in the last three years to a mistrust of the sector.

Chris Cummings, director general for Aifa, said the results showed the retail distribution review offered a perfect opportunity for consumers to re-engage with the industry.

He said: "Consumer demand for IFAs tends to increase in turbulent market conditions. But there is still a large percentage of consumers who do not understand the difference between different types of sales and advice."