Change Adviser Titles to Tackle Public Confusion

The financial advice sector should move away from describing advice professionals as ‘financial planners’ or ‘financial advisers’ and adopt more descriptive definitions in order to demystify financial advice, according to a former planner and dealer group marketer.

Fraser Jack

myonlineadvisers.com.au, CMO, Fraser Jack

myonlineadvisers.com.au, Chief Marketing Officer, Fraser Jack said while the two current terms are well understood by those who receive advice, those who do not receive advice consider advisers and planners differently and do not see the need to deal with them.

“Consumers often think financial advice or financial planning is about investing. This may be the reason why only 20% of people get advice because if you do not have the cash to invest, why see an adviser or planner?” Jack said.

He called for greater definition in the labelling of advice professionals to offset consumer confusion, pointing to the medical profession which clearly distinguishes between different types of doctors according to their training, skill sets and expertise.

“We need to start with a clear definition and categorisation of the many different types of adviser or planner, let’s make it very clear for consumers to understand what different advisers do,” Jack said.

“…let’s make it very clear for consumers to understand what different advisers do”

“If we take a look at the medical profession we have GP’s and a long list of specialists, so we know that a cardiologist can help us with any heart or cardiovascular issues, and we understand our GP’s role in our general health,” he added.

He stated that in the area of financial advice there are only two terms despite the fact that some practitioners provide holistic advice, while others specialise in life insurance, self-managed superannuation or retirement, leading to consumer uncertainty as to whom they should see for their particular needs.

“When it comes to financial advice we are all either financial advisers or financial planners. What does that say to consumers when we can’t even work out what we do ourselves?” Jack said, adding the advice sector needs to take a few steps back and consider consumer perceptions first before it can move forward

“If we just stick with financial adviser or financial planner we will not get over the confusion that exists. These new terms will still need parameters and rules around their use and practitioners will still have to be educated and licensed to provide the advice,” he said.

“If we have to explain what we do for consumers, then we have lost them, like when you have to explain a bad joke.”

These new descriptions for advice providers, with their relevant conditions, should be enshrined in law as a profession, according to Jack, who stated the sector and government was already considering enshrining terms based around skills, experience and this would be an expansion of that process.

“The terms should be enshrined in law as a profession, but let’s get more than just these two words, let’s come together and document all the specialist areas, and set out the standards of what we do for our clients. We can then give this to the policy makers to enshrine,” Jack said.

“If we have to explain what we do for consumers, then we have lost them, like when you have to explain a bad joke. Simplicity is important because we don’t have time to grow into the terms we are currently using.”

  • GuyM

    Common sense. I have never wanted to be identified as a financial adviser or planner because in my case both are totally misleading (and isn’t that something we are supposed to be avoiding). I would like a title which reflects the fact that 100% of my time and effort is spent on insurance.

    • Ken

      What needs to be ” de mistified” is the consumers belief that if they require the services of s financial planner or financial adviser it comes with an ” automatic” fee
      We as advisers ! whatever we call ourselves need to get across to people that free advice is available to at least initially have them enquire .My experience seems to indicate they think that financial planners and financial advisors come with some exorbitant upfront cost !
      I sometimes think that the reason they call the on line insurers is more than the perceiving that it’s easy but also free
      Like it or not people like to “hang onto ” their funds and if they can get what they think is the right advice for FREE it does not matter what you describe yourself as. A lack of willingness to at least ask and find out is only one reason out of many why we have this current under insurance problem in this country

      • Fraser Jack

        Great points Ken, 1. do the public go online to start a process and do research, lets assume they are searching for the product they are looking for aka insurance? 2. the information they get is free online so paying for it becomes a stretch. Unless they find it hard to decide and implement, then they would ask for help from specialist. 3. If they are only initially after a single service they would hesitate to go to a financial adviser if they don’t know what we do.
        When it comes to fees, we need to use the terms “fee for advice” not “fee for service” as service is an expectation not an additional expense.
        Thanks for your input Ken.

    • Fraser Jack

      Guy lets explore options around what you would want the public to know you as. do you consider yourself as a Risk Specialist? is that the best term for the general public that don’t currently see advisers?

  • Ben

    Good idea in theory, and I am an advocate for specialization, however, who determines what you specialize in? Would this mean further education requirements for specialists, or can I just nominate myself as an aged care or investment specialist, for example, because I am interested in or think I excel in those areas? I’m sure a cardiologist has more training in heart related matters than a GP would.

    • Fraser Jack

      Great points you raise Ben, the expectation would be you are qualified to advise within your specialty, and with the current rise in education standards as well as ongoing CPD I imagine it created an opportunity to spend more time on the topics that you specialize in rather than some you don’t, what are you thoughts?

  • Scott Kilvington

    This issue I have with your suggestion is that many of us offer a range of different specialties. Personally approximately 50% of my revenue is from insurance commissions and the other 50% is from advice fees, primarily superannuation and retirement planning. However I do offer margin lending and investment advice, but it’s not a large part of my business. I think it would be impractical to have more than one title.

    • Fraser Jack

      Thanks Scott I appreciate you taking the time to comment, would you consider yourself “Holistic”?

  • Gav

    no one can really say exactly what we do unless they’ve sat across the table from us. Every single one of us does something different – even in the same office a clients advice outcomes can be different based on the conversation skills of the advisers.
    I like the idea of a specialist qualification and a GP being differentiated. I also think that in general, the name we are called has nothing to do with the problem of consumers not seeking advice.
    Our professional bodies have done practically nothing to raise the profile of advice – show the consumers what we do, how we help clients in broad terms…or dare I say it – case study like advertising campaigns and see awareness of our services increase dramatically. Until we reach the consumer, it doesn’t matter what you call us.