Public perception of financial planners has returned to its lowest levels since records began, with pollsters blaming the industry’s complex ownership and remuneration structures.
According to the Roy Morgan Image of Professions Survey 2013 – which polled more than 600 Australians aged 14 and over in April – only 25 per cent of respondents rate financial planners “very highly” for “honesty and ethical standards”, down from 26 per cent in 2012 and 28 per cent in 2011.
The figures indicate that perception has fallen to the all-time low of 25 per cent recorded in 2008 and 2009, during the height of the global financial crisis.
“Despite the efforts of the financial planning industry, public perception is in decline,” Roy Morgan communications director Norman Morris told ifa. “It’s certainly not going in the direction [financial planners] want in terms of building up their public image.”
The figures place financial planners 17th on the list of professions, below lawyers (15th) and accountants (11th). Nurses took out the top spot, followed by pharmacists and doctors.
Morris said while respondents are not asked to qualify their answers for this survey, other research conducted by Roy Morgan offers some insight into why public perception of financial planners is in decline.
Partly it can be accounted for by the fact that Australians are confused about the “superannuation and wealth management space” in general.
However, Morris also singled out the contentious issue of business structures and remuneration models within the financial planning industry specifically.
“If you look at the professions that have ranked highly, it’s very clear what they do and what their qualifications are, but I think there is confusion about financial planners,” he said.
“People don’t know exactly who they are, whose brand is on the door, whose product is whose, and the various complex brands and ownership [structures].
“So the whole idea of independence and of the planner working for the client and not for someone else is very foggy compared to a doctor-patient relationship.”
Earlier this week, Association of Financial Advisers (AFA) chief executive Brad Fox conceded there is still more work to be done on the consumer perception of financial advice professionals.
“We do need to rebuild consumer trust in financial advice,” he said. “It has copped a beating from all sorts of things”, he said, singling out the global financial crisis, Storm Financial collapse and declining superannuation balances.
“We’ve got to find a turning point and that turning point is 2013. We’ve got enforced legislative change, we’ve now got to get the message very clearly out there to the consumer that says when you go see an adviser you can trust them.”
An industry body has renewed calls for exiting major banks and institutions to pay their share of the ASIC levy. ...
The Reserve Bank of Australia has made its latest call on the official cash rate. ...
The owner of Madison Financial Group has found itself in the middle of an internal coup, as a company owned by one of its executives brings forward a ...