The IFAonline blog discussing Jeremy Clarkson's comments - last week likening IFAs to thieves - has prompted a busy response from readers.
IFAonline editor Julie Henderson suggested his remarks illustrated the size of the gap between the industry view of IFAs and public stereotypes.
IFAs have responded agreeing with sentiment expressed by stating Clarkson’s comments hint at the root of a huge problem within the industry – independent financial advisers are not trusted by consumers.
Phil Billingham, of IFA consultancy firm Perception Support, says financial services as a whole remains bogged down by the public’s perception of an adviser interested solely in his own bank account and not that of his client.
“The core of the problem is the image of someone who sells a product that will hopefully make the client money,” he says.
“Problems then arise because inflation makes the final return for their £20 a month a waste of time, or they surrender early and perhaps just about break even.
“The fact is that this is what we - and I include myself - used to do. We were not crooks. But there were more than a handful of very sharp operators around then, to say the least.
“We went from insurance salesmen and women to investment advisers, and took the credit for the FTSE going up. Well, fine, but guess who they blame when it goes down?
“Most IFAs have moved away from this but most bancassurrers have not. Clients do not understand the difference.
“We don't need to gang up on Jeremy. We need to recapture our 'brand'. What IS an IFA? What does that actually mean to the public?
“And guess what? It's not the PFS, IFP, or even Aifa, who will do this. It will be us."
Nick Bamford, managing director of IFA firm Informed Choice, says a problem facing financial services is that bad news overpowers good news.
“I was very irritated (by Clarkson's comments). Perhaps that’s because I care passionately about what I do and, whilst I know I shouldn’t take this kind of prejudice seriously, I am afraid I do.
“But then I started to think about it and perhaps came to a more balanced view of why people like Clarkson say such things: either they have had a first hand experience of poor service and advice, or they are repeating generally reported misconceptions.
“I bet for every negative experience throughout the UK there are 100 positive ones. The problem is that good news is not newsworthy.
“I disagree with Julie Henderson (on her advertising campaign suggestion). I think the last thing we need is any kind of major advertising campaign as that will simply not work. Advertising does not change perception. What changes perception is action and behaviour.
“The solution to this problem is multi-pronged. Firstly, the whole adviser community must accept that the benchmark level of qualification for the delivery of advice is simply too low. The FPC is, quite frankly, a joke given the highly technically complex financial world in which we live and no one without advanced level qualifications should be allowed to call themselves an adviser.
“Secondly, the FSA needs to deliver the outcome of its Retail Distribution Review this year and not let it drift on into 2008 or later.
“Thirdly, [we need to] recognize that there is the world of difference between the 'trade' bodies and the 'professional' bodies, and that each has an entirely separate agenda.
“Perhaps we should accept that there are very good reasons why the government is trying to strip back the level of advice, and why some consumers think that they can do it better themselves. Perhaps collectively the adviser market isn’t as good as it thinks it is.
“Ultimately It is up to us, individually and collectively, to change, and not for the consumer to be told we are better than they think we are.
“If we do a good job the consumer’s hearts and minds will come with us.”
Phil Calvert, sales director at technology firm FinanceCube, says a possible solution for advisers could lie online.
“The shame is that we have been discussing this for years yet there has been very little change in the perceived image of IFAs and providers in the eyes of the public.
"Our continual bombardment of the consumer with marketing messages is grossly inefficient: Advertising AT them is yesterday's mindset, whereas marketing WITH them is the way forward.
"The big trick we are missing as an industry is that we are failing to follow consumer trends. For example, when they want information on financial matters, the first place they turn to is the internet.
"What's more, 45% of internet users now spend time 'networking' in online social networks. And yes, MySpace is one of them.
“Social networks offer our industry a mouth-watering opportunity to reconnect with the consumer, by integrating and embedding our marketing messages into online communities.
“Both providers and IFAs can use online networking technologies to establish focus groups, enhance the perception of our expertise, and create word-of-mouth referrals.
“The internet is where the action is guys. It will help us to promote ourselves, enhance our image, obtain valuable feedback, build networks of clients, and create exciting new distribution routes that have more relevance to today's consumer.
“That's not to say that face-to-face advice is no longer relevant; far from it.
“The IFAs that will survive and thrive will be those that offer an exciting mix of on and offline services - meeting both the needs of the modern consumer and enhancing the service offered to existing clients.”
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 Scott Sinclair on 020 7034 2636 or email scott,[email protected]
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected