Independent financial advisers are the most trusted practitioners in financial services, ahead of building societies, investment companies and life insurers, a study concludes.
The ‘Fairness Index', produced by the Financial Services Research Forum at Nottingham University Business School, looks at consumer perceptions of fairness with regards to financial services.
It found IFAs enjoy by far the highest ratings on overall fairness, with an index score of 84 out of 100, significantly higher than the industry average of 72.
The Index takes into account a wide range of measures including impartiality, familiarity, courtesy and communication.
Advisers were followed by building societies (75), investment companies (73), life insurers (72), and general insurers (72). Banks (68) and credit card companies (63) received the lowest ratings.
Chris Cummings, director general of the Association of IFAs, says: "Not only is the [IFA] profession the most trusted, but it is also regarded as the most fair - this is no mean feat given the recent economic conditions.
"It also further reaffirms that the public recognises the IFA profession's core value: ‘The guiding light is to do well by the client'."
Professor Nigel Waite, director of the Financial Services Research Forum, adds: "When it comes to IFAs, consumers' perception of fairness is particularly influenced by courtesy, communication and familiarity.
"It is perhaps not surprising that familiarity should be seen as a significant driver of perceptions of fairness in this context, as a degree of familiarity is crucial to fulfilling the role of an IFA successfully.
"As Government and employers transfer responsibility and risk to individuals, we must encourage consumers to take more interest in their financial affairs.
"Fair outcomes for consumers will help create a sense of confidence and trust in the marketplace, which will help persuade customers to engage more meaningfully with financial matters. This will benefit consumers, the financial services industry and the UK economy."
| Comment | IFAs ‘most fair’ in financial services – study |
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FSA ?
What a pity nobody has told the FSA ?
Posted by: Paul Wilkinson
Its the FSA "broken model" theory that is broken!
So how does this square with the FSA RDR proposed cull of 10,000 IFA who are predicted to leave the industry as a direct result of the FSA, the same FSA caught asleep on watch as the banks failed, the same banks that are predicted to be the beneficiaries of RDR? In light of the findings that IFA is considered the 'most fair’ in financial services – how can the FSA continue with their "broken model" sham?
Posted by: SIMON MANSELL
IFAs most fair
To Guliver - actually, there is nothing wrong with being a salesman. In any industry (including financial services) you can have the best product in the world but if you don't have good sales people you might as well pack up and go home. It's only in britain that sales people are castigated - in other countries, especially the US, sales people are paid handsomly for a job that is considered essential for business success. You should be able to sell ethically and responsibly to people who need your product without being likened to Pol Pot (not that the FSA would understand either).
Posted by: bill wells
FOS/FSCS - Got your ears on good buddy?
Hello FOS. Anybody there? Are you listening? Pity then we have to pick up the tab for other people's mess at the FSCS.
Posted by: Harry Katz
has the FSA read this?
"Most Fair" what a comment! and I suppose this can extended not only to the way we do the job but also the way we get paid for doing the job..... so who actually has a problem with IFA,s being paid by commission obviously not the clients. Do I detect that the problems that the FSA has with commission payments are dreamed up have no basis in reality and as I suspect are based on the fact that this bunch have nothing better to do other than making changes for change sake and we are all paying the price!! Would be nice to be on the bonuses these guys are on
Posted by: Graham Barney
A Timely Reminder
This is not news, of course. By news I mean a revision of a previously held view. Previous surveys have highlighted that IFAs command a greater trust than bancassurers and insurers direct sales forces. The timely aspect is that tomorrows RDR edition IV will continue to espouse the gospel of the broken model and will seek to 'fix' the problem. How much more factual evidence will it take to convince the theorists that the 'problem' is one of perception. that being a conclusion by Charles River Associates within their report commissioned by the ABI in 2005
Posted by: Alan Lakey
Recognition at last!
It is gratifying to hear of this report. However, IFAs being forced to take higher level product exams against their will won't make them better or more trusted advisers! The FSA needs to revisit the RDR before they destroy an industry the public at large need and clearly trust! Note I didn't call it a profession which it isn't!
Posted by: Derek Vivian
Unfair
I have never seen any fairness in the sale of products in financial services, products and structure are in place to rip off the clients and this is promoted from deep within and at the top of companies. Good guys do exist but in my experience a good product means good commission. If the product is suitable it will sell itself, sell your technical wisdom not use sales chat up lines to flog rubbish products. Financial services in the UK continues to have a very low bar and standard and well done for the FSA in trying to raise this but bad work by the FSA for ignoring the sales cultures promoted by MD's and CEO's in finance companies which lead to clients being ripped off.
Posted by: Guliver
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Industry full of sales people
Bit like saying Pol Pot was a nice guy compared to Stalin and Hitler
Posted by: Guliver