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.”
Again, Politicians, stop treating super legislation like a sport!
Gerry, dont sweat the small stuff. If a client is willing to use a non-advice, low cost platform, then dare I say it, you wouldn’t want them as clients. If they make decisons based on costs from the outset, then it is always going to be about costs not matter what value you can offer them.
Just as there are cowboy financial planners, there are cowboy clients. Let the instos have both as far as I’m concerned. By doing so clears a path for the intelligent clients to engage independently minded advisers.
They’re the types of client’s you want.
Given that our industry is now supposed to be free of conflicted remuneration and hidden fees due to FoFA when will ASIC let us give quality advice without having to prepare an SOA? Just think of how our perception amongst consumers would lift if they could come and see an adviser for an hour or two, pay their bill and walk out. If implementing a product is required, sure, maybe a brief SOA and a PDS…with the extra reforms on top of existing requirenments, sadly we are pricing ourselves out of the market.
Industry super funds now offering DIY super, SMSFs being flogged off by all and sundry…and soon we shall be seeing the big direct marketing push by the instos effectively bypassing the traditional advice channel….wrap platforms for DIY investors, low fees….undercut your adviser. No skin of the instos noise.
Our public perception takes a dip when investors go through a downturn. They have lost money, confidence and trust.
Lack of true independence, high up-front commissions, high management fees with little investor contact, sus agri-business schemes, hidden commissions, sagging economy, are all contributors. Also inexperienced planners put investors into high risk asset allocation, despite an overheated market.
There are many reason for this lack of trust by investors. No one reason is the cause, and no one answer is the solution.
Investors also panic. When the market drops, they sell growth assets, generating losses. They compound this by waiting for the market to fully recover, before returning to growth assets. They are already fully priced.
Let’s control what we can. Independent advice, fee-for service, and regular reviews.
for Jay #25, Individually we can do nothing. Even a collection of us “individuals” can do nothing. We can ignore the 75% and just do good work for clients. Product suppliers and those who support them are the major problem in FP! BTW, NOT all PS are included in my assertion. We NEED ASIC to be more productive! What can you do to bring this about? I have a plan.
SB – , I hardly think that that is what Peter was referring to, all Peter is saying is that when the markets are doing well clients stop blaming advisers…it has been well documented in this threat that advisers get the blame for everything whether it be a product failure or whatever.
[quote name=”peter foreman”]please lets see this survey after a year of 20% performance in the managed funds industry,[/quote]
…and then what? We’ll see financial planners take the credit for it? Please!
Actually Patrick, lets not get too carried away with the memberships. As part of our licensing requirements, we have to belong to a Professional Association.
No ticket, no start. Sound familiar?
Hi David Munro
The FPA is governed by it’s board, the majority of which are practitioner members who are voted in. Voting rights are only held by individual practitioner members. I can assure you that regardless of their employment they are every bit as independently minded as the various contributors here.
Equally, the vast majority of the FPA’s revenue comes from membership dues which are invoiced individually.
The FPA changed it’s constitution several years ago to enact this change precisely because members did not want it to be controlled by any institutions.
Terry: Sadly I think you are right. However, I will correct a typo I made in my previous post. The FPA did not have more than 100 new members this year – it has had more than ONE THOUSAND new members. Deserting in droves, indeed!
spot on David, we are the easy targets
and us individually are a threat to the union super funds– Even they say it at their conferences, they will do anything to slag, bag and remove us.
I still believe (prove me wrong) that Fund managers, banks, insurance companies control both AFA and FPA. For evidence of control see ASIC 017029159 AND ASIC 017029177 where large groups caused great public distrust. No doubt advisers were blamed, wrongly. These large groups are immune to public opinion whereas advisers are easy game.
Patrick,
I could not agree more.
Instead of accepting the blame, these planners try to deflect the blame to the FPA, government, Industry Funds, unions, well anyone really.
You will never get them to change their minds, because their prejudices cloud their thinking. And their prejudices are too ingrained to accept facts or logic.
So save your breath, these people need a forum to stamp their feet. They enjoy venting, and they don’t believe anyone else anyway.
Look, my son Johnny is the only one in step!
I fail to understand what all the diatribe is about. The survey was taken over 600 people (14 yrs and over)and they didn’t have to qualify their answers. If you are not accountable for your answers, then the questions are invalid. I am sure I could get a negative response about Ghandi with the same methods. Whilst I appreciate the efforts of the AFA and the FPA in working towards lifting our reputation, being a member of an association doesn’t automatically mitigate responsibility and fiduciary care. Enhancing our reputation is not going to have them flocking to us for advice. We provide something that cannot be touched, smelt, driven, painted or renovated. Providing the intangible will always be open to interpretation and ridicule. It’s far easier to change the public’s perception one client at a time.
So, an article on public perception of planners turns into a sledging session on the largest planner association in Australia which has experienced over 100 new members this year, by respondents who either aren’t members of that association or haven’t bothered to check their facts.
It’s probably that level of intellectual rigor that has led to this result in the first place.
This is only my opinion, members of FPA who are associated with fund managers do as they are told. Just robotics at work! They are the majority of members as they are told to be. I left FPA as a “senior” grade member MANY years ago. I see no changes for the better.
i wish people would wake up and have their own minds and actually see whats going on out there. Dealer Groups and Union funds can still accept rebates from life companies and fund managers, our major industry body sold us out in the final hour with fofa and company who i loath AMP was the only one sticking up for advisers and the AFA with minimal funds who i am not a member of mind you.
Oh and as for the FPA. They forgot who they should be representing years ago. Hence why no planner i know wants anything to do with them. They have no clue how to support planners & are just interested in more study & red tape to keep the subscription fee factory & course charging alive. Well done FPA you are intsrumental in ruining an industry. You will see planners ditch your membership in droves over the next 5 years.
This industry that ince helped people is a joke.
Choked with complance, overwhelmed with pointless paperwork & not one client needs nor wants any of it. It is all about protecting the dealer group & its PI premiums/cover. I am disgusted at this industry & what it has turned into so it is without any surprise the public have had enough. Who wants to pay for your complance. If we were a car industry we would of closed down years ago. Its like buying a Falcon/Commodore for $10,000 then paying $50,000 on road cost & every few thousand kms being tapped on the shoulder for another $2000 just to get some directions & given a street directory once a year. This industry is a joke!
While Advisers still take funds managers grubby money to switch to their license and consequently sell their soul in the process the 25% figure has little hope of improving. Advice is more conflicted than ever with less independents than ever. Government rather than solving the problem has made it worse. Doctors are not controlled by drug companies and look where they and Pharmacists sit on the ladder….
I really would like to see the sample breakup- that will make the results a lot clearer and pin point the sources of discontent. NOW, that would be fair to all concerned because I reckon the way the report is written is an SLUR on all planners, anyone can make target sampling achieve the desired result. Lets get to the bottom of negativity in this industry and stop self destruction. I know a lot of advisers are 90% + in satisfaction, so be honest and back up the story with FACTS
Jay – I am a director of the FPA so I do know the stats. Many of our members work for Industry Super Funds and good on them. That doesn’t mean we are ‘cahutes’ (sic) with union super funds as membership rights are at individual level.
David Munro – the masters of the FPA are the individual members. We do not have corporate membership, no product manufacturer has any voting rights. The FPA does what its members want it to do, through a democratic and transparent process.
We are two notches below lawyers!And they are full fee for service and no conflicts so there isnt much upside for our profession.
I refuse to be included with those on 25%. I am pleased I do not need or use AFA or FPA to lobby on my behalf. If they have the welfare of their members as their target they seem to miss, constantly. It is clear they are fearful of their masters. (product suppliers?)AGAIN! product suppliers lose clients’ money, not advisers.
Can’t argue with the figures as presented BUT I firmly believe that those who advise professionally and ethically will show a much higher score. If you treat clients like hamburgers you get this sort of outcome, if you treat clients correctly I reckon the satisfaction level will be in the 90’s. The best gauge is the internal referrals. Independence is rarely 100%, but those not aligned are much closer to the mark. Product floggers give the industry a bad name, strategic advice and great communication are the key. Products are only tools to achieve outcomes. That’s the steps to really becoming a professional.
[quote name=”Patrick Canion”][quote name=”jay”]
reason why FPA dont quote is they are now in cahutes with the union super funds, its a conflict[/quote]
Hi Jay, what rubbish, the FPA has devoted significant time and money to promoting the standing and public perception of financial planners in general and members in particular. If you were a member you’d know that, if you aren’t a member I’d suggest keeping your comments to your own area of expertise.[/quote]
i did and i was shocked to see how many members they have with the FPA, have a look at the CFP registry alone. its ok you can fly off the handle, do some full research alone on the FPA website and you will see. Its a great source of membership for FPA as new planners. Look alone at CFPs working for industry funds.
please lets see this survey after a year of 20% performance in the managed funds industry,
[quote name=”jay”]
reason why FPA dont quote is they are now in cahutes with the union super funds, its a conflict[/quote]
Hi Jay, what rubbish, the FPA has devoted significant time and money to promoting the standing and public perception of financial planners in general and members in particular. If you were a member you’d know that, if you aren’t a member I’d suggest keeping your comments to your own area of expertise.
I think the general public who do not have experience dealing with a professional financial adviser wouldn’t know the difference between a financial adviser and a property spruiker or similar opportunist touting themselves as a ‘financial adviser’. Quite agree that this is a pointless waste of research time and effort. We are all doing our own client surveys and our clients love us, love the advise, care and effort we show in making their lives better. Who cares that those who know nothing about us don’t rate us. The researchers may as well go an ask darkest Africa how they rate Australian Doctors compared to their tribal traditional healers….
[quote name=”gully 116″]Your own reporting doesn’t really add any clarity. If you write a piece on “Public perception of financial planners” Wouldn’t it at least be appropriate to ask the chief executive of the FPA for comment before you ask the chief executive of the AFA[/quote]
reason why FPA dont quote is they are now in cahutes with the union super funds, its a conflict
These results are no surprise; its the 9 years of FSR and financial advisers being caught in the political crossfire with fractured representation. When you go to the doctor and he says, “You’ve got bone cancer, we recommend taking the leg off”, he doesn’t then give you a 50 page document about why he’s chosen the XYZ titanium bone replacement, and that’s because he isn’t paid by XYZ Titanium products. Sadly, with 80% of advisers CHOOSING to live inside product houses, we can look forward to rubbish opinion polls for ages to come.
Your own reporting doesn’t really add any clarity. If you write a piece on “Public perception of financial planners” Wouldn’t it at least be appropriate to ask the chief executive of the FPA for comment before you ask the chief executive of the AFA
We all know the reason for this. The Industry Super Funds have spent millions of dollars attacking the integrity of financial planners in a desparate attempt to steal our clients. The decade long campaign worked, so it won’t stop. The heavy handed legislation, and the media reporting around it, has also been a big negative over the last year, and it will get worse with FOFA approaching. Fortunately, surveys of actual financial planning clients have consistently shown a very high level of trust. So let’s ignore the knockers, hold our heads high and keep delivering outstanding service.
1. We have Government placing bad perception upon us- Bill Shorten – Responsible
2. We have Union Super Funds placing Bad perception upon us – Whitely, Bill Shorten, Pauline Vamos, Resposible
3. Failed Products- Research houses not looking into Strength of parents companies, GFC, Advisers expalining risk or not explaining true impact of risk and Shorten / union funds blaming advisers, Union funds covering up their investments in these products.
4. For years Planners trying to do the correct or perceived to be correct Fee for Service model basically set up for massive regulartly change to allow Union Super funds for Final Nail in the coffen to send Planners back to specialise to survive.
5. Any perceived perception of anything going wrong in the Industry is always the advisers fault.
6.Storm this and Storm that, thats all im hearing, one licencee out of how many and all of a sudden every planners is dammed for Storms strategy
Another media beat up. Pretty easy to target an industry and professional group which is continuously on the back foot following the actions of the few.
Do we get all hot and bothered about visiting health professionals when one of their group gets done for mal-practice? NO!
So lets have an informed and intelligent discussion please rather than emotive drivel!