NCAs not helping public perception of advice

The financial services royal commission took a significant toll on advisers, leading to somewhere in the range of half leaving the profession entirely.

It also drastically reshaped the face of the financial advice profession, removing product providers from advice and making vertical integration a thing of the past.

Those working in the financial advice sector understand how much things have changed in just five or so years, as do their clients, but the response to the latest details on the new class of advisers (NCA) has shown that the broader public – those these measures are in theory being designed to help – are stuck with an outdated perception of advice.

Check the comment section of the mainstream media articles on Financial Services Minister Stephen Jones’ announcement last week and you would think it was 2019.

Commenters are railing against financial advice – and not just what they expect to come from a super fund NCA. Apparently financial advisers are untrustworthy, biased and driven by commissions.

The hard work done to remove conflicted remuneration was, it seems, a figment of our collective imaginations.

Others have argued that advisers are less trustworthy than used car salesmen, real estate agents and even politicians.

A few complained about the cost of advice, which based on every piece of research over recent years, is a persistent complaint until people actually get advice.

However, some don’t understand why anyone would even need financial advice – just do a bit of research and sort it yourself!

While the readership of ifa would understand that the criticisms of financial advice don’t make a lot of sense, it highlights part of the problem advisers are facing – perception.

Public perception rarely cares about facts and takes a lot to turn around.

The royal commission was massive news and got a lot of attention among mainstream audiences. The response did not.

In the minds of far too many Australians – Australians that could seriously do with financial advice – the lasting impression they have is the problems that were highlighted.

They never even heard about the changes.

When the only thing many in the broader public are hearing about advice comes from announcements of legislative changes, it’s not surprising that their opinion on the whole profession is filtered through this lens.

The NCA announcement could be positive or negative depending on how it plays out – the profession may end up with more fully qualified advisers down the track if they get the education side right – but in the eyes of the public, they are now seeing advice as collectively charged through an industry super fund.

The perspective that this is essentially super fund socialism might be a bit far, the prevalent view that paying for advice you aren’t receiving is unfair is a sticking point for many.

Whether intended or not, that’s the view of advice many Australians are stuck with. Breaking this perception is just another in a raft of challenges facing financial advisers.