- Posted by Adam Smith
- On July 16, 2018
Financial advisers are continuing to face an uphill struggle when it comes to how they’re perceived by the general public, the results of a new survey show.
The latest release from the Financial Conduct Authority (FCA) as part of its Financial Lives Survey highlights a fear among consumers that advisers are still out to make a quick buck rather than help them to secure their financial futures.
So why, given the sea change in the way the financial services market operates in recent years, is this apparently indelible trope so hard to shake off?
It’s fair to say that the world of financial advice used to have wild west feel about it. Advisers required little training and few qualifications, and the majority earned their money through commissions leading to some dubious operating practices.
But these days are long gone, in a large part thanks to the Retail Distribution Review (RDR) of 2012. This far-reaching shake-up introduced many new measures aimed at professionalising the retail investment sector.
Financial advisers must now meet minimum qualification levels before they can operate and are bound by strict FCA rules in terms of accountability and ‘treating customers fairly’.
Commission-based earnings from fund companies in return for recommending their investments have been scrapped and advisers now have to declare whether they are offering ‘restricted’ or ‘independent’ advice and make these differences clear to the client.
Put it another way, post RDR the financial advice landscape is now a highly regulated arena populated by trained professionals who are duty bound to give advice that is in the best interest of consumers.
So why does this negative impression highlighted by the FCA survey persist? Is it perhaps that not enough has been done to counter the old view meaning people still fear the hard sell from a commission incentivised salesman who turns up on their doorstep?
I think so, and surveys such as this only serve to demonstrate the importance of an effective PR strategy that not only generates additional business, but also educates the public about how the industry has changed.
A good PR strategy will subtly convey this message alongside general releases and in the long run should help build the reputation of not just an individual adviser but the industry as a whole.
After all, it’s becoming increasingly important for advisers to stand out from the crowd, especially with the rise of the robo-adviser.
Although many advisers I speak to are confident there will always be a demand for face-to-face human advice, many admit that robo-advisers present a threat when it comes to people who have relatively simple financial needs. And this is only going to become more of an issue as people’s confidence with the technology grows.
So next time you consider your reputation and that of the retail investment sector as a whole, especially if you have lived and breathed it pre and post RDR, give some thought as to what you’ve done to help spread the message that there has been far-reaching change.
Have you asked your PR firm to advise you on this and help get this message across? If not, then perhaps now is the time to do your bit to raise awareness of the ‘new’ financial services landscape.
- Call Adam on 07543 195476 for a free, informal chat about your public relations requirements.