The latest research from Investment Trends had told financial planners what they already know – that public perceptions of planners has been significantly negatively affected by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Trust in planners has fallen to a new low, placing them in the ‘distrusted’ range, but this is less the case amongst people who use planners.
The latest Investment Trends 2018 Financial Advice Report, which reflects the views of nearly 8,000 respondents, found that more than 40 per cent of respondents believed the financial services and banking industry had not met its obligation to everyday Australians and that trust in planners was at an all-time low.
Commenting on the results, Investment Trends senior analyst, King Loong Choi said that each year, the firm asked Australians to rate their level of trust (from a scale of 0 to 10) in 11 different professions and financial services sectors, ranging from accountants to super funds to their friends/family.
“Unsurprisingly, Australians trust their friends/family the most (average score of 7.0) while politicians sit at the other end of the spectrum (3.0),” he said. “But in the last 12 months, trust levels have fallen most severely for banks and financial planners to below five out of 10, and into the ‘distrusted’ range. Banks fell from a trust rating of 5.5 to 4.8, while financial planners fell from 5.1 to 4.8.”
“The trust impact of the Royal Commission is real, and the financial advice industry must take proactive measures to rebuild trust among the wider population,” said Choi. “One of the most important steps involves lifting transparency in every single aspect of the advice process.”