The royal commission has made an undeniable dent in the public’s trust in financial advisers, a new survey has revealed.
New findings from a survey by financial services marketing agency Yell and research firm Ipsos, conducted in June during the royal commission, has revealed that consumer trust in financial advisers dipped by 6 per cent since 2017.
Likewise, trust in banks also dropped by 8 per cent.
When asked to rank financial services organisations according to trust, financial advisers fell from third place in 2017 to fifth place and banks slipped to third place from second place in 2017.
“This year’s results showed an acceleration in the gradual erosion of consumer trust that’s still not being recognised by the industry as a whole,” said Yell founding partner Nigel Roberts.
The financial services industry would need to take responsibility for the declining trust and reorient its offerings to better serve the customer, he suggested.
“The challenge for all of financial services and especially the banking sector, is to halt the slide in trust or face real consequences,” Mr Roberts said.
“This can be achieved, but will involve much greater empathy and delivering solutions that truly meet customer needs, rather than meeting sales targets.
“The shift away from pushing product requires more than just having a view on the vast quantities of data currently being collected; it needs a human-centred approach as well.”
He also posed the question of whether incumbents would see a “significant commercial impact” as new market entrants entering the industry did not “carry the stigma of some of the established players”.
“We’ve seen the big four shifting away from wealth services ahead of and during the royal commission, maybe in anticipation of any potential findings, but the question is: will it be enough to protect them from the emergence of neo-banks and other viable alternatives in Australia?” Mr Roberts asked.
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