With one key benefit of the professionalisation of the financial advice industry by the Financial Adviser Standards and Ethics Authority (FASEA) being its potential to improve consumers’ trust in the industry, a major obstacle remains in informing the public that change has occurred.
While advisers were acutely aware of the incoming changes to education standards, many consumers were not, and the communication of these heightened expectations for planners could be vital in ensuring the outcome of improved trust was achievable.
At a media roundtable, Centaur Financial Services director and the Association of Financial Planning (AFA) and Zurich 2018 Adviser of the Year, Hugh Robertson, said that the industry could take two approaches to this. Firstly, it could “do nothing” and rely on the fact that many consumers already presume that advisers are degree-qualified.
Alternatively, it could “try and enlighten people” that standards are improving through the professionalisation reforms. While businesses would try to do this however, Robertson thought doing it at an industry level was a much tougher ask.
A somewhat unconsidered issue facing advisers training to meet the FASEA regime requirements was that the process of education itself could make consumers question their confidence in them – that saying you were studying a financial planning degree could make you seem as though you’re on your L plates, when you’re an experienced planner.
Director of TWD Australia, the Zurich and AFA’s 2018 Practice of the Year, Cara Graham was hopeful that the soft skills of advisers could help overcome the bias some consumers may have here, saying that empathy, manner with clients, and client testimonials should mean good advisers still got new work. Robertson also suggested that the cost benefits of seeing someone who was still studying as opposed to fully qualified could appeal to some new clients.
In terms of improving the reputation of the industry in general, Graham advocates getting more stories about the positive effects of financial advice out there but acknowledges that “that doesn’t sell and that’s not sexy”.
“But we still have to get that story out there and we have to articulate that and be proud,” she says, adding that it’s the responsibility of advisers, industry bodies such as the Financial Planning Association (FPA) and AFA, and even publications to do so.
It would be worth remembering as well that it took the industry a long time to hit the point of poor reputation that it now had. As such, Robertson believed that it would only improve gradually, as the most likely means of change, such as word-of-mouth, would take time.