IFAs are rubbish and bent: get advice from journalists
Just In Time PR founder & ex-Money Management journalist Dominic Hiatt argues the press has no right to criticise anybody else’s advice
What with RDR and all that, IFAs have been put through the media wringer in recent years.
Read the papers and you’d think they’re all bent, inept, focused purely on commission (until 31 December anyway) and providers of average advice.
For 1 per cent that’s probably true. But for 99 per cent it’s not.
The journalists who write these stories are, of course, whiter than white – focused purely on the consumer.
But are they?
When it comes to writing on investments, personal finance journalists are consistently the worst perpetrators of shoddy financial advice there is. If not intentionally.
Here’s an example, a short article from the Telegraph. I’m interested in the last paragraph, where the article wraps up by saying that Mick Gilligan of Killick& Co ‘likes’ a selection of funds, including an investment trust called Law Debenture.
We’re told nothing whatsoever about these funds – nada about their risk structure, etc. All we’re told is that Mick likes ‘em.
I see this kind of throw-away sentence ending personal finance articles all the time – particularly in the weekend papers. And each time it pains me.
Thing is, a journalist on a prestigious national newspaper reeling off a few funds at the tail end of an article can cause people to go out and stick money into those funds.
And anyway, just because Mick Gilligan ‘likes’ them does not mean he would recommend everyone should invest in them – that will naturally depend on a person’s circumstances and attitude to risk.
The reality is that he may not ‘like’ them at all for 75% of the article’s readers.
It gets worse.
The journalist fails to mention that investment trusts are unique structures and trade at discounts or premiums to their net asset value.
If you’re an IFA, you’ll know that how an investment trust trades relative to its NAV will influence its level of risk, but the reader of this article who may go out and invest in Law Debenture won’t. And I haven’t even checked if this investment trust is geared.
But hey, as long as Mick likes them then that’s OK, right?
In summary, IFAs are often hammered by journalists for being bent and untrustworthy, but then those very same journalists give advice — albeit unwittingly — that is about as poor as it gets.
With articles like this, journalists will simply say that they’re not advising at all, just singling out funds that may be worthy of further research by their readers.
If only life were so simple.
This blog first appeared on Just In Time PR’s own website