According to Ponyboy there are two kinds of people: greasers and socs. The latter have money, can get away with just about anything, and have an attitude problem. Greasers always live on the outside and need to watch their backs. Ponyboy is a customer…er, greaser.
No, S.E Hinton’s classic coming-of-age novel The Outsiders is not about the financial services industry and its attitude towards customers/consumers.
However, it has a certain ring about it in the ongoing discussion over how and to what extent advisers should undergo examinations to boost their skills and maintain confidence in the industry.
You see, while various industry regulators, associations and bodies struggle to make their voices heard in the cacophony of competing interests to set examination standards, the one view seemingly forgotten is that of the end consumer of financial services and products. It is like Ponyboy trying to put forward his thoughts on what should really be done to narrow the gap between the socs and the greasers.
To another humble outsider the answer seems simple: consumers like to know standards are set because it makes them feel safe. And when consumers feel safe they will proceed, for example, to cross the road when the little green man appears, and not cross when the little red man appears.
Without the trust, consumers will take matters into their own hands, and try to take shortcuts, or not bother at all to gain financial advice. Either way, they usually end up with the short straw, especially if hit by a vehicle when crossing the road at an inappropriate moment.
And yet, standards do not necessarily have to be stringent.
As long as standards are broadly acceptable to most people and come at reasonable cost, then most people are content to follow them.
Therefore, getting people to save more over the long term and across a variety of asset classes, as well as seek out more advice on issues such as protection, ought to require the asking of consumers what it is they want from the process of exams standardisation.
Above all, consumers will want to know that standards upheld through examinations are being met and actually count for something.
Without that confidence, all the talk of improving minimum standards, or improving professionalism through an examinations regime will be for nought.
Telling the consumer the industry knows his or her needs better than they do themselves will also not improve the situation. Until direct communication with consumers improves – and this does not mean through an association with a particular pitch – the industry runs the risk of creating wonderful standards for examinations, which no person seeking financial advice will trust.IFAonline
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