Advisers must embrace “radical thinking” and form a “collective voice” to shake off negative perceptions of the industry, experts have urged.
Neil Moles, chief executive of financial advice business Progeny, said recent research highlighting the public’s negative view of financial advice was a “wake-up call” for any business “genuinely serious about the future of the industry”.
But he added there were reasons to be “optimistic and positive” if advisers collaborated as an industry to improve education about advice.
A survey by OpenMoney, which polled 2,080 adults earlier this year, has revealed a negative view of financial advice.
It said words and phrases like ‘hidden agenda’ and ‘an enforced rip-off’ came to mind when consumers were asked for their reaction to the term ‘financial advice’.
While more positive associations, like ‘help’ and ‘expert’, were also mentioned, 28 per cent of respondents said they would need to trust the sector more before they took financial advice.
Mr Moles said: “Many of the people who would benefit hugely from advice don’t know they need it, how they would benefit from it or how to go about getting it. Now is the time for radical thinking and new solutions.
“To achieve this, more collaboration will be crucial. Not only is the competitive, sales approach a turn-off for clients, but we can accomplish so much more if we work together. Any wholesale change in public perception will demand a united effort from all of us across the advice industry.”
Mike Barrett, consultant at the Lang Cat, said the post-Retail Distribution Review narrative that financial advice had shifted “from an industry to a profession” was justified, but added it was a “shame” the message was not getting across to the wider public.
He said: “I’d like to see large providers, especially the big, vertically integrated businesses, doing more in this respect by working closely with the adviser professional bodies and using their scale to take the message to the general public.”
Keith Richards, chief executive of the Personal Finance Society, agreed that a united front was necessary, and said online interactions sometimes worked against this goal.
“The sector can be its own worst public relations enemy, with fragmentation and accusations too freely flouted through social media and forums available to all onlookers.”
Despite the RDR banning its use on investment products, the survey found that ‘commission’ was also mentioned by respondents several times.
This implies the issues surrounding perception appear to stem from those who have never experienced the industry, rather than consumers who have used a financial adviser.
Research from Aegon, shared with FTAdviser, shows the vast majority of those who had taken financial advice were happy with their experiences.
Some 94 per cent of the 1,220 consumers polled who had received advice rated the quality as ‘good’ or ‘very good’, while people who maintained a relationship with a financial adviser enjoyed a much higher level of financial wellbeing than those who did not.