The royal commission into financial services revealed examples of unconscionable behaviour by members of the advice industry, which have quite understandably caused consumers to be wary and question the value of financial advice.
These revelations significantly impacted the level of trust the community had in our sector, and while we advisers know that these examples did not reflect the experiences of the vast majority of clients, in an industry where we deal with people’s livelihoods, money, emotions, and future, it is no surprise that the result was a significant loss of trust with the community.
Overcoming misconception and mistrust around financial advisers to build a stronger industry
The recommendations and legislation that followed the royal commission have set the advice industry up in a unique way, to reinvent ourselves and redefine the role that we play in supporting clients. We can reinforce ourselves as a source of trust within the community, helping create a more secure financial futures for Australians.
The changing industry dynamics have shone a light on what we can offer when we have the right processes, people, and – importantly – culture to deliver quality, value, and goal-driven advice to consumers.
Stigma is often a barrier preventing consumers from regaining trust, and it is up to us as financial advisers to find ways to overcome that stigma, by shining a light on the significant evolution of the industry to help restore community trust.
Building trust by investing in client relationships
As a self-employed adviser, I am very conscious of the costs associated with running an advice business, however I have also learned that giving more to clients in the early stages of the working relationship, even if this is made up largely of non-chargeable hours, is the work that builds trust and encourages long-lasting relationships in the future.
Over the years some of our longest lasting client relationships have been formed with people who initially may not have had particularly complex advice needs, but whom we have been able to partner with over time as their needs have changed.
This has ensured we work extremely hard for every client to find ways to add value, provide high-quality service, and build sustainable, long-term relationships as an investment in the possibility of the future.
Advocating for the industry to communicate the benefits of financial advice
When it comes to advisers, the more we can share insurance claims success stories or client goal achievements among other advisers, and across multiple platforms, the more we can collectively appreciate the value of advice.
I have observed that when clients are advocates for advisers and share their experiences with their loved ones, a certain level of validation is added to these stories.
Continually looking for ways to exceed community expectations actively demonstrates the value of an effective financial advice industry. For me, this is key to getting the advice process right in addition to strengthening the level of transparency and engagement to gain the trust of consumers.
There is also a key role for life insurers as partners to the advice industry to support advisers in showcasing the value of the sector and highlighting the role we play for our clients when they find themselves going through more difficult times. Stories like those on TAL’s website have the potential to inspire and reinforce the importance of advice.
Reinforcing the advice industry’s connection with the needs of Australians
Financial advice has never been more important for Australians, and the sooner clients are able to trust their adviser, the better the outcome will be for both their financial future and the relationship moving forward.
While the past few years have seen elevated levels of scrutiny on the advice industry, the operating environment for advisers has experienced a great evolution, and we should be proud of the reputation and relationships we enjoy with our clients.
Troy Scott, director and adviser, Scott Wealth
Great article Troy
So, [i]”The royal commission into financial services revealed examples of unconscionable behaviour by members of the advice industry, which have quite understandably caused consumers to be wary and question the value of financial advice.”[/i] has it?
Well, according to AFCA’s latest stats….less than 1.5% of THEIR complaints are directly related to advisers – with 0.03% being the total figure when those left unsettled are counted up. That to me says WE ARE NOT THE PROBLEM when it comes to who consumers have been shafted by and who they SHOULD be wary of when it comes to financial advice. I just wonder who the other 98.6% of consumer complaints WERE directed at? Don’t let the truth get in the way of a headline though. That wouldn’t support the agenda wouldn’t it?
I could have spoken for pages and pages on this. There is no agenda, I am an adviser just like yourself. It’s a one page article, it can only say so much. Well, anon, I assume you are an adviser.
There are a few holes in this story but also a few truths
1/ To say the general public had a problem with trusting financial advisers now and before is false. The only cohort that fit into this narrative are the people who did not have an adviser .
2/ The major issue that came out of the RC was fee for no service which was highlighted with the AMP ( orphan book ) that no adviser relationship was there.
3/I would argue those individuals who had an adviser very much trust them , otherwise why would they stay with them
4/ We all charge non billable hours . Taking this to the extreme is the FDS OFC forms we are having to do know that takes over 2 hours per client .
Here is the positives
1/ There is no greater contribution to society that a planner can do than adequate insure our clients and be there at claim time
Agree, I think the article, for its length explained a few of your points around the experience of the vast majority of clients, that it’s a stigma (and not necessarily experience) and we just can’t hide from
The fact that we have to retire trust in the community 🙂
AMP have just finished the look back, fee for no service, audit of their current advisers and 90% have passed, so only 10% of advisers (about 140) were charging fees for no service in hindsight.