The majority of advisers are arguably out to do the best for their clients, but the media are making it difficult to attract more clients, due to constant scaremongering.
While it is vital for journalists to be watchdogs and to ‘hold the bastards accountable’, there must be a balance between watching the good as well as the bad. However, journalists know that the latter travels further and faster.
FPA CEO Mark Rantall understands the need for the media to get headlines, but says the whole financial planning industry is trying to do the right thing.
“I think it’s pretty unfair to attack an industry that’s making a concerted effort to implement reforms as quickly as they possibly can. I think it’s a lack of understanding of the issues.”
Rantall says that some journalists are guilty of thinking about the industry as it was, rather than what it is and can be. “I can understand why people would want to focus on the negative, but we’ve undertaken the most extensive reforms that we’ve ever seen in this country, and there’s been an enormous cost impost to the industry, and the whole industry is getting on with implementing it.”
Business analyst Max Franchitto agrees that three decades of regulatory change and government focus has made financial services an ideal target. The focus also has to do with the industry itself, he says. “The reason why financial services is such a target is because it’s such a large money industry...Funds under management, superannuation, insurance premiums, it’s a huge industry.”
Franchitto says that the media definitely has an influence on the thinking of the consumer, and says that even if potential clients don’t read the financial news, other professions such as lawyers and accountants do, and that’s how they form a dim view of the profession.
On-Track Financial Solutions adviser Odelia D’Silva has experienced this situation first hand. She says her company realised the need for providing aged care advice and therefore became accredited. However, clients that came in to talk and needed the advice didn’t end up getting it because of negative stories.
“After talking to siblings and other people, they said ‘oh no, they don’t trust financial planners’ so they didn’t come for the advice.”
“We’re charging them fees, there’s no product – it’s just advice. There was no product to sell so it should be really clean but some people are asking ‘do the aged-care facilities give you a kick-back?’ and we say ‘no, you will pay us a fee and that’s for the benefit that you will see’.”
One such negative story that has Rantall concerned is an article that says advisers are able to receive commissions until 1 July 2014. He says this sort of scaremongering is ‘totally inappropriate’, and the FPA plans to write to the newspaper.
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