Accountants trump planners in honesty and ethics survey

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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.

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  • Accountant/Ex fin planner on 17/04/2014 9:48:27 AM

    The bad publicity It may have something to do with the ongoing display of people in various forms of the finance industry being banned or jailed. It will change.

  • GAB on 9/04/2014 4:12:44 PM

    From the quality sample of comments on this story, I conclude that financial advisers are a lot smarter than the people who write about them, and I find it incredible that ASIC can use a survey of people off the street to then have another swipe at financial advisers to cover up their own failings.

    I can only assume there were no leading questions in the survey? (for example)

    Q. Would you prefer

    A. Transparency of fees, or
    B. Hidden commisions

  • Tash on 9/04/2014 9:50:16 AM

    Can I make a bold statement - maybe there's a large proportion of the Australian population I don't want to look after. Planning is a discretionary spend, and people can survive reasonably well without it. The system allows/encourages people to be disengaged. Our target hit rate may be 20% of pop'n. I can't stop someone buying a Range Rover Evoque, just as I can't make people buy one. I'm off track, but @IO and @Gab are spot on.

  • Innocent Observer on 8/04/2014 3:13:27 PM

    @GAB hits the nail squarely on the head.

    If you want to know how much people trust their financial advisers, ask those with financial advisers (or at least who know what a financial adviser does); not some muppet on the street whose educate opinion is nothing but the spawn of misleading ISA advertisements.

    As a bit of constructive criticism, a more useful poll would be one that measures trust between those who (a) use, (b) have used but no longer use, and ( C) have never used; a financial adviser.

  • GAB on 8/04/2014 1:38:20 PM

    "An area of great concern is things like fees and transparency of fees". You know what...I'm starting to think this is not actually the case when I speak to my clients. The transparency of fees and eradication of so called "hidden fees" is of no concern to them. They want me to paid fairly but the most important factor they keep telling me is "Trust". They couldn't care less whether I charge a set fee or by percentage or by commission.

    "..but not trusting their financial planners". Not surprising given the negative press and rubbish like FoFA. It's not compulsory to see a financial planner. Most people filling out the survey probably can't afford to pay for advice.

  • Bob on 8/04/2014 11:20:15 AM

    I am not surprised, with all of the negative publicity we get (& just from the industry funds) it is a wonder we are not being sought out for sacrificial burning.

  • Alistair on 8/04/2014 9:58:48 AM

    Oh yes please another survey to bag planners. I love researchers who come up with this stuff. As an accountant, let me say that planners we have on staff are brilliant. They engage clients in facets beyond just tax and compliance and add value to our practice as they tend to be a bit more human and passionate about their work. They engage and inform clients whereas the accountancy professional been dealt blow after blow in transaction work that is compliance driven.
    As I also have a statistics background I wonder about the sample they have used for such they say statistics statistics and more damn statistics.... these folks and their puppet masters need to get a life.

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