A major report shows that the image of financial planners is still taking a hit, and it was the only profession to suffer a declining rating of perceived ethics and honesty over the past two years.
Roy Morgan’s recently released state of the nation report includes a detailed spotlight on changes to the financial services market since the Wallis Financial System Inquiry (FSI) in 1997.
The report also includes its annual image of professions survey, where participants have rated professionals in financial services either “high” or “very high” on their ethics and honesty.
Financial planners’ public image has steadily declined since a peak in 2011 and now sits on a 25% rating.
Every other category – accountants, bank managers, stock brokers and insurance brokers – have all either improved their public image over the past two years or stayed the same.
Overall however, planners’ image still sits in the middle; behind accountants (49%) and bank managers (38%), but in front of stockbrokers (15%) and insurance brokers (13%).
Roy Morgan CEO Michele Levine is not particularly surprised by the results, but told Wealth Professional
that now is more important than ever for planners to improve their public image.
“Since [Wallis] there’s been this extraordinary growth in superannuation, but most Australians are not that financially literate,” she said. “So there is all this extra money and people not being as knowledgeable as they need to be, but not trusting their financial planners – how will that play out?”
Levine said changing the public’s perception on anything is notoriously difficult, and joked that an advertisement campaign saying “love your financial planner” is certainly not the way to go.
Instead she said the role a financial planner can play in people’s lives needs to be articulated more clearly.
“They’re seen to be somewhere between rocket science and black magic, but people need to know there’s no magic in this. All those basic things need to be articulated,” she said. “An area of great concern is things like fees and transparency of fees. If planners can tell to people how that [works] they’ll be seen to be guiding people through a maze rather than doing black magic with a pot of gold at the end of the rainbow.”
The Association of Financial Advisers (AFA) are also very concerned about the terrible public image financial advisers are enduring, and addressed this in their submission to the FSI.
COO Phil Anderson told Wealth Professional
that the groups with vested interests pushing false or misleading information to the public in regards to the FoFA amendments have a lot to answer for.
“We’re concerned that the negative media coverage doesn’t paint financial advice as the good profession it should be,” he said. “Across the industry we need to address this issue about the public perception of financial advisers. Over the last two months the [FoFA] coverage has had a very detrimental impact.”
Anderson said as only two out of ten people in Australia currently use a financial adviser, that remaining 80% now stands to have an even more tarnished impression of the profession.
The AFA submission also suggested
that ASIC should have stepped in to umpire the frenzy of information pushed into the public realm by different groups.
“I guess it’s probably not an easy time and the amount of negative coverage was so significant, but it’s a good case study as to have should have happened to avoid inaccurate reporting over the past two months – it’s worth looking at,” said Anderson.