Nothing is holding back advice sector more than fear itself

Jon Cudby

When I was a kid, seemingly every commercial break on TV was littered with public information films. Every time I watched Magpie, it was punctuated with kids drowning while swimming in reservoirs, Charley telling me not to talk to strangers or Alvin Stardust asking my peers if they were “out of their tiny minds” in response to their gung-ho approach to road crossing.

These films have slowly died out, either because the government became less willing to fund them or because they simply lost interest in stopping us from killing ourselves through stupidity (it’s one way to tackle the savings gap) but the seed was sown. Somehow we were all convinced that danger lurked round every corner.

This fear took hold and, despite humanity as a whole living longer, healthier, wealthier lives than at any other point in our collective history, we are all convinced that things have never been worse.

Article continues after advert

In Dan Gardner’s excellent book, ‘Risk’, he argues that our regular exposure to bad news has skewed our collective perception. News coverage of plane crashes means millions are terrified of flying, but the crashes are comparatively rare events and by far the most dangerous part of any plane journey is actually the drive to the airport.

However distorted our understanding of how dangerous the world is, our behaviour has changed as a result. At the risk of sounding like a misty-eyed old buffer, when I was young, we played out the front of the house and put our rubbish out the back. Now it is the other way round.

A general paranoia has pervaded all aspects of our lives and, predictably, has impacted financial advisers’ view of themselves, their industry and their place within it.

Advisers seem to universally believe that everyone is out to get them. The most obvious example is the deep-seated belief that the regulator is a terrible thing and wants to destroy the advice sector. In my experience, IFAs are far from alone in disliking their regulator. As surely as footballers hate referees and drivers hate traffic wardens, a mistrust of those charged with policing it is the default setting for every profession.

I was at the Pims conference a few years ago when a catering convention was running on the boat at the same time. Some of their delegates wandered into a finance presentation by mistake and settled at the back. They were oblivious, happily nodding along in agreement as the talk went about slating the FSA. It was probably half an hour before they realised the speaker was talking about the Financial Services Authority rather than the Food Standards Agency and they sheepishly slipped out.

If not the regulator, advisers are keen to highlight several other annoyances chipping away at their daily professional life. The Money Advice Service is a pain. Hopelessly inadequate and you are expected to fund it, but it is no more a threat to your business than the Citizens’ Advice Bureau has been historically. (Continues on next page)