Investors view the whole of the financial services industry through the prism of banks' behaviour, meaning trade bodies must do more to talk up the good the profession does, according to ex-Morningstar OBSR managing director Richard Romer-Lee.
Romer-Lee (pictured), who has set up consultancy firm Square Mile Investment Consulting and Research with Nigel Whittingham after the pair left Morningstar OBSR last October, said there remains a "serious lack of trust in the industry".
This distrust is "mainly" as a result of banks' behaviour - such as the scandals around payment protection insurance (PPI) mis-selling and LIBOR rate rigging - he said, but the effect ripples across the rest of the industry.
"To investors we're all banks," he told a conference in New York.
To counter this, the industry needs to engage with people more, led by the trade bodies, according to Romer-Lee.
"The Investment Management Association (IMA) - where is it saying asset management does this good, does that good? I'm frustrated with trade bodies. There is work for them to do."
As well as reputational issues, advisers are also dealing with increasing costs, decreasing revenues and squeezed margins, Romer-Lee said.
"A lot of advisers are finding it difficult to turn a profit as independent," he said.
"I think we will see an increase in the number of restricted advisers over independent."
Romer-Lee also sees challenges for life companies and platforms.
"Platforms need to consolidate. The industry doesn't need 70 platforms.
"Life companies used to bundle tax, investment and savings products, then they unbundled them and now they are bundling them again. They need to modernise."
Romer-Lee is positive on the effects of the Retail Distribution Review (RDR), saying it has raised professional standards and introduced greater clarity between the different types of advice available.
However the cost of advice remains "as clear as mud", he said. "More work needs to be done in this area."
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