A new survey has revealed the degree to which negative publicity has impacted the financial planning industry.
The RaboDirect Financial Health Barometer survey has revealed a dramatic decline in perceptions of financial planning between 2014-15 — the period during which newspaper and television reports critically traversed issues within Commonwealth Financial Planning, Macquarie Group, and National Australia Bank.
The survey data covers a five-year period during which it noted that there had only been a slight shift in the number of people who distrust financial advice.
But it went on to note that "when looking at yearly comparisons, there was a substantial shift between 2014 and 2015. In 2014, 40 per cent of people said that they trusted financial advice, but in 2015, this figure fell to 29 per cent".
"When comparing different generations, although more Gen Ys trust financial advice, there has been a bigger downward trend year-on-year in this group compared to other generations," the survey analysis said.
"In 2014, 49 per cent of Gen Y agreed that they trusted advice provided by planners or advisers. In 2015, this figure had dropped ten percentage points to 39 per cent."
It said that for Gen X in 2014 this figure was 41 per cent, dropping to 26 per cent in 2015, a change of fifteen percentage points and for Baby Boomers in 2014, the number was 31 per cent, falling to 23 per cent in 2015, a difference of eight percentage points.
Comments
What do people do when they turn away from financial advisers? They get self help advice from the media. They buy direct products advertised in the media. They buy more property advertised in the property websites that keep media companies afloat.
Adele Ferguson, Alan Kohler & co have a massive commercial conflict of interest when it comes to reporting on financial planners. No wonder their reporting is so biased and misleading. It's also an absolute disgrace that the ABC unquestioningly regurgitates the commercially conflicted content of these two.
By all means lets root out the bad apples in financial planning. But tarring the whole profession with the same brush for clear commercial gain is just appalling. Thankfully most financial planners have far greater standards of professionalism than most journalists.
I blame our lily livered associations, who just don't seem to want to put their heads up to be heard in the public like our detractors are. The charter for these organisations is promote the industry and its members. I have never seen an ad in the papers , trying to rebutt anything bad said about us over the past few years. Sure there are ads in industry rags but who reads them except us? You know we do this every day we speak to clients and meet them and they say oh I didn't know financial planning was like this, I just went off what they said on the checkout...so its up to the organisations to stand by ALL of us, get out there, away from inhouse conferences and safe places, get into the media more, call up the radio stations, rebutt the stuff that is not true. We need more public support from our professional organisations!
This is the heart of the problem TJ. At some point the FPA decided or voted on, a change to its 'role' being one of a consumer advocate as well as a members professional association. They say that you can be both. But it then becomes a matter of priority, and their priority has been consumer rights.
FPA marketing budget badly spent. You raise a good point TJ. The FPA has been charging a marketing surcharge for years now and the only activity I've ever seen is in the AFR. Talk about preaching to the converted. The battle for the hearts and minds (and superannuation) is being won on the TV and in the tabloids... not in the industry press. Where does the ISA advertise?
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