Trust in Financial Advisers Remains Low

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Only one in four Australians rate financial advisers favourably in terms of ethics and honesty, according to the latest findings from Roy Morgan.

The annual Roy Morgan Image of Professions Survey revealed that despite the increased interaction with, and need for, financial advisers/planners, just 25% of consumers rate their honesty and ethical standards as very high.

Financial advisers/planners have been included in the survey for the past six years, reaching a high of 28% in 2011. However, the rating fell back to its lowest level of 25% in 2013.

Rating of Professionals in Financial Services on ‘Ethics and Honesty’, Roy Morgan
Rating of Professionals in Financial Services on ‘Ethics and Honesty’, Roy Morgan

Roy Morgan said issues such as independence (and ownership), commissions and consumers best interests clearly needed further scrutiny as part of the Financial System Inquiry.

“Considering that the level of financial literacy among the Australian population is generally quite low, it’s vital for consumers to have confidence in the advice they receive from financial planners and other industry professionals,” Michele Levine, CEO of Roy Morgan Research said.

“The amendments to the FoFA legislation will hopefully encourage more focus on consumers’ best interests, and make financial advice more accessible, affordable and trustworthy for Australians while protecting them from commission-hungry sharks.”



1 COMMENT

  1. The decline in investor confidence has occurred primarily as the percentage of independent financial advisers has also declined. Most independent advisers are either in single person practices or in small group practices, with many attached to accounting firms. Their future depends on their integrity, care and personal service and to satisfying their clients financial objectives. Many have long standing relationships with their clients and consider them friends.

    There are numerous advisers who are now in the employ of institutions who have integrity, but their focus may not be exclusively on the institution’s clients or their financial objectives, and probably the investor feels or has experienced this change in focus.

    The poor, repetitive publicity surrounding advisers, without much in the way of counter argument has also compounded the problem.

    A greater awareness of the divergence between the two groups, i.e. independent or institution controlled needs to be broadcast and stressed.

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