James ConeyJul 21 2021

Social media has helped advisers - but it can also hurt them

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We need to talk about Twitter.

What we ought to discuss is whether actually some financial advisers are, well, trolls.

There, I've said it. And more to the point, whether their use of social media is a benefit or actually harmful to their reputation.

Some advisers might not think they are trolls, but if you take a long look at their Tweets, and the hostility and certainty with which they shout down other social media users, you can be left with only one conclusion. 

Like it or loathe it, social media is here to stay, and Twitter is a front window into your business. 

And it does not matter how personal you think your comments are, they reflect as much on your abilities as an adviser as the actual financial planning you do.

In many ways, I think Twitter has been very helpful for advisers. It is at its best when advisers are sharing their day-to-day working tales of tricky situations with clients and how they have planned their way around them.

It is genuinely a delight to hear the success stories of customers who have neared the end of their investment journey and are delighted with the outcomes.

And it has unified disparate advisers from across the country with a common purpose, allowing them to share tales of service woe when dealing with large insurance companies, for example. This was never really possible before, at least not without networking events.

I regularly hear from advisers who have organised their own get-togethers, and become friends, all after sharing their views on Twitter.

But social media also brings out the worst in people: the confrontational, rude and hectoring side. It is not a place for nuance or debate. It is also an environment where you can easily be misunderstood.

In the past week I have seen advisers from vertically integrated businesses shouted down by those from independent businesses.

I saw a hugely respected journalist from the Financial Times told they were scare-mongering because they wrote an informative and balanced piece about tax reform.

They are not alone: my journalists at the Times and Sunday Times are attacked like this all the time, usually because of what they have not written and what critics wanted them to write.

I had a columnist who was writing about their own personal circumstances and who consulted three accountants, abused and harangued by financial advisers who did not like the decision he took.

And then there is the routine and offensive intimidation of the Back to 60 pension campaigners. 

Whatever you may think about this group, they have the right to protest, even if you vehemently believe they are in the wrong (though I also acknowledge that in some cases their behaviour has been shocking).

At the heart of this seems to be a view that only financial planners should be allowed to talk about money. No one else should be allowed to express an opinion that they do not believe in, seems to be their belief.

It is true that the internet, and particularly social media, is packed with charlatans, but advisers do themselves no favours by attacking those they believe are a threat.

They do so with the certainty of people acting in an echo chamber.

Twitter can be useful, it can be funny and entertaining. But if you are on it you need to think very carefully about every word you type, because it can also be exceedingly damaging.

Action needed on underperformance 

The Financial Conduct Authority’s decision to put on the back-burner a long-promised review of funds that consistently underperform is disappointing. Once again you are left with the distinct impression that fund managers are continuing to get away with it.

This is particularly the case as just a fortnight ago the FCA published its review of how value assessment reports were being carried out. It found that many fund managers were simply making unjustified claims in their reviews of their own funds and demanded they act.

There were always going to be teething problems with value at risk models as businesses were more or less left to their own devices, but it does again highlight how hard it is for ordinary investors to get reliable information about fund manager underperformance.

This is why action is needed.

Cut through the noise 

Why do you need a financial adviser? To help you cut through the marketing noise of the fund managers.

From Russia to palladium, from frontier funds to ESG and now we have Japan – fund managers always have a tale to tell, particularly if it is good for their assets under management.

James Coney is money editor of the Times and Sunday Times

@jimconey