The report is being launched at a Parliamentary event with Shadow Financial Secretary to the Treasury, Mark Hoban MP, AIFA Director General Chris Cummings, and Professor Nigel Waite, Director of the Financial Services Research Forum. The event is being attended by industry leaders, consumer groups, politicians, press and regulators. At the event Chris Cummings will call on the Financial Services Authority (FSA) to use the Retail Distribution Review to build on the high level of trust in IFAs and not introduce confusing labels for consumers.
Chris Cummings, Director General of AIFA, said: “It is a sad fact that just at the time when the UK public needs to have confidence in financial services, global economic events have shredded much of the trust we had in our largest financial services institutions.
“However unlike all other parts of the sector, the public’s trust and confidence in IFAs goes from strength to strength. Research also confirms that consumers show higher level of trust towards independent advisers than they do tied advisers.
“We recognise that perception often lags behind reality – sometimes even in policy making and regulatory circles. That is why we have taken this step of publishing the latest research findings to encourage policymakers and regulators to listen to the voices of the UK public, and subsequently ‘build on that which works’.
“The impact of restoring trust, and promoting the value of trusted financial advice, cannot be underestimated, especially at this current time.
“We now call on the regulator and government to build on this trust. The FSA should not seek to confuse consumers with misleading labels and reduced access to those who consumers trust the most to act in their best interests, IFAs.”
The paper sets out the latest research findings from respected, impartial, organisations on the issue of consumer trust, and outlines steps that can be taken to re-engage people with the financial services industry.
Key findings of the paper include:
IFAs are consistently the most trusted of all Financial Services Institutions (FSIs), both in terms of low level trust (the extent to which an organisation can be relied on to do what it says it will do) as well as high level trust (the extent to which the organisation is concerned about the interests of its customers).
This trust in IFAs has increased over the past 5 years, despite the economic turmoil and challenges of recent times.
However, the same cannot be said for other FSIs who have seen their levels of trust not only remain low, but in some cases decline even further.
An increasing number of people from across the socio-economic groups are now turning to IFAs for advice to guide them through these difficult times, and these numbers are set to increase should the conditions continue or get worse.
The regulatory structure should therefore build on that which already works. This means having a clear and simple market which is easy for consumers to understand and navigate.
Current regulatory reviews present an opportunity to restore consumer trust and significantly improve financial outcomes for consumers, providing it makes absolutely clear to them the difference between independent advice and all other FSI models.
"Restoring Trust in Financial Services: Building on that which works” is available to view at: http://www.aifa.net/news/publications.php
