Tuesday, April 1st, 2014 - Roy Morgan Research

Launched this week, the latest Roy Morgan State of the Nation report includes a detailed Spotlight on Changes to the Financial Services Market since the Financial System Inquiry (Wallis Report, 1997). There have been some dramatic changes to the market in that time, including the rapid expansion of wealth management and an increase in the number of financial products held by the average Australian. Consequently, our need for reliable, solid financial advice has grown.

Unfortunately, very few Australians trust professionals in the financial services industry, rating them consistently poorly for ‘ethics and honesty’. Not exactly the best foundation for a successful working relationship, is it?

Trust me, I’m a financial planner…

Despite Australians’ increased interaction with, and need for, financial advisors/planners, only 25% of us rate them favourably in terms of ‘ethics and honesty’. The government’s current amendments to the FoFA legislation clearly recognise the need to protect and inform consumers, but issues such as independence (and ownership), commissions and consumers’ best interests will need further scrutiny as part of the current Financial System Inquiry.

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

image-of-finance-professionals

Source: Roy Morgan Research; Annual Image of Professions Survey

Although bank managers received a higher rating (38%) than financial planners, their image has taken a hiding since 1997, when 58% of the population rated them positively for ‘ethics and honesty’. This decline is cause for concern, as a bank manager is often the highest level of finance services professional that consumers would deal with — so inspiring confidence is important.

Michele Levine, CEO, Roy Morgan Research, says:

“Roy Morgan has been tracking the image of the more traditional finance professionals such as bank managers, accountants, stock brokers and insurance brokers since 1985/1986. Stock brokers and insurance brokers rate consistently poorly, while accountants are held in higher regard.

 

“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.

 

“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.”

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Keywords

Finance, banking, financial planners, state of the nation

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