Advisers have hit back at Which? over its recent survey highlighting the lack of trust consumers have in the financial services industry.
A survey of 528 people by Which? on Tuesday revealed less than half of consumers trust the financial services industry and one in five have had a bad experience with a financial company in the past.
Several IFAonline readers have criticised the survey for lumping all types of financial services together and have reacted in anger to comments from Doug Taylor, personal finance campaigner for Which?, who said the industry failed to deliver on stakeholder pensions.
Martin Bamford, director at Informed Choice, says:
“Consumer perception of IFAs is certainly improving. I suggest that it will continue to improve as consumers come to understand the difference between independent financial advice and independent financial sales. Our big challenge now, as IFAs, seems to be convincing the public that we have shared values.
“The research from Which? appears to lump together all financial services companies without making the distinction between the different sectors of this market. There is a world of difference between trusting a bank, an insurance company or an independent financial adviser.”
IFA Richard Blackmore criticises Taylor for blaming the financial services industry for the failure of stakeholder pensions. He says:
“Good old Which? It’s all our fault again – failing on Stakeholder pensions. They have failed because by the time I have driven 40 miles to see a client, spent hours fact-finding and researching, received any fees or commission and paid tax on it, I am out of pocket. What business in their right mind would structure their income generation to work at a loss?
“The majority of us are hard working, decent people who respect our clients and do all we can to help. It’s just a shame that by the time you have visited your client, someone is able to change some rule in our industry before you’ve managed to get back to the office. It’s like swimming in mud!”
IFA Des Rushworth adds:
“Free advice is very often undervalued. How can Which? or any other organisation that picks up a salary accuse IFAs, who are generally self-employed or running their own businesses, expect us to give advice to any individual without payment? I am sure that type of advice would be readily available in the bar on a Friday evening. I do recommend ‘stakeholder’ plans but only on a fee basis. The profit is minimal because of the cost of PI insurance and the levies.
“As far as confidence in the industry goes, if people stop bringing up the mis-selling issue that happened in the 80s by sales divisions of companies, perhaps people would stop using that as an excuse for not providing for themselves. The individuals without provision are those who are not prepared to save and all the rest is just ‘smoke and mirrors’.”
Geoff Pollock, partner at R T Financial Planners, says Which? needs to realise the fact the government introduces a system does not mean it is by definition workable and economic. He states:
“Personally I liked stakeholder pensions for my clients, but look at the situation now there is 1.5% cap. There is even less of a gap between stakeholder and regular personal schemes. Perhaps the industry was telling the government what was possible and not what was desirable. I wish Mercedes Benz cars were sold for £1000 – desirable but not possible!
“My criticism of Which? is they know the price of everything but the value of very little indeed.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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