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Backstage with Keith Richards

10th June 2016

 

The Personal Finance Society recently commissioned a survey to measure the level of trust and confidence in the financial advice profession. It followed a similar survey we published in our 2013 report The RDR and Consumers.

I am pleased to report that the survey shows that the trust and confidence of consumers who use financial advice has increased by 40% in the past three years, jumping from 43% of advised customers who said they trusted the sector in 2013, to 60% in 2016.

The result clearly demonstrates the improved sentiment since the RDR, resulting from the profession's commitment to raise standards and improve public perceptions.

As a 'united profession' we have an opportunity to improve public perception further, as the survey also shows that the perception of unadvised consumers has remained static since 2013.

Just 18% of respondents who had never sought advice said they had trust and confidence in the advice sector, unchanged from 2013. While there was a slight improvement from 2013, when 48% of unadvised consumers said they didn't trust the advice sector, 41% still hold this view. The remaining respondents said they were unsure.

It is clear that advisers are having a positive impact on those who seek their services, but there is still work to be done to convince the public more broadly of the value of seeking professional financial advice.

Hopefully no one has missed the fact that the UK government has publicly demonstrated improved trust in our members by mandating advice within its policy reforms. The government clearly believes in the value of advice, which is why it has been mandated for safeguarded benefits, care, and the proposed secondary annuity market, and additionally led to the Financial Advice Market Review reviewing how to increase access.

By working collaboratively with the regulator and Treasury to improve access to financial advice, and by demonstrating the cultural behaviours of the profession, I am confident that we can continue to shift perceptions and encourage engagement.

We intend to undertake a third survey later this year to track progress. Congratulations on the improvements that you have all made but please continue to play a key role in promoting a 'united profession'.

'Holistic expertise' can still be achieved   

In its Occasional Paper 17 on access to financial services last month, the FCA suggested that consumers who were looking to take out a mortgage should have access to 'holistic advice and guidance'.

This, the regulator suggested, would help consumers consider borrowing in the context of other personal circumstances such as pensions, possible future care needs and inheritance.

Some of you would have noticed our response in the press last week:

FT Adviser: SMP confident brokers can offer 'holistic expertise' to customers

As chief executive of the Society of Mortgage Professionals, my vision for the mortgage and protection profession matches that of the regulator, and I am confident that the FCA's proposal can be achieved.

But this will only happen if mortgage and protection professionals are equipped with the relevant skills, developed through a combination of qualifications, ongoing CPD and an ability to refer to an appropriate adviser.

A balanced programme would enable mortgage advisers to continue to provide consumers with reliable advice, while identifying and making appropriate referrals to suitably qualified advisers for any needs that go beyond mortgages.

I welcome efforts to develop the skills of advisers who display a commitment to their profession, and invite you to join our campaign to evolve the sector.

By doing so, you will play an important role in providing consumers with the full breadth of information they rely on to support one of the biggest financial decisions they will ever make.

Changes to the board

I am pleased to inform you that the PFS nominations committee has completed interviews for the two member-nominated director positions being vacated by outgoing directors David Ingram and David Thomas.

After receiving a record number of applications, and following an exhaustive interview process, the committee has put forward the two successful candidates to the board ahead of formal approval at the AGM on 14th September.

Awarding excellence

Last week I was lucky enough to attend the Money Marketing Financial Services Awards.

As part of a judging panel for two of the key adviser and paraplanner categories, I was extremely impressed with the calibre of nominations, and selecting winners was a difficult task for the judges.

I want to congratulate all finalists and winners at last week's event, and thank them for the fantastic work they're doing day in, day out for their clients, colleagues and the profession.

 

Best wishes,

Keith

 

About the Blog

In this blog Personal Finance Society CEO Keith Richards will be keeping you up-to-date with all the Personal Finance Society news, projects and initiatives that we have in the works.

Read past editions of the blog »