Time to promote advice: Dodds

More needs to be done to promote the use of financial advisers, the chief executive of the Institute of Financial Advisers says.

Friday, November 28th 2014, 6:00AM 3 Comments

by Susan Edmunds

Fred Dodds said his organisation had been visited by the Ministry of Business, Innovation and Employment in preparation for next year’s review of the Financial Advisers Act.

He said they were interested in things such as investor confidence, the complexity of regulation, the quality of advice and consumers’ access to advice, and wanted to eventually canvass the public as well as industry opinion.

But Dodds said one of the issues for the sector was a lack of promotion of personalised financial advice. “If you don’t promote it, it’s not going to happen.”

He called for sector players to work together to make it happen, including the FMA and Sorted.

“Even if you go to Sorted and read this and that, there’s no link to ‘want to find an adviser?'”

Dodds said it would be beneficial to have some serious work done promoting financial advisers. While public surveys might elicit some positive comments, most people ranked advisers low on the trust scale.

The industry should seek and publicise the views of clients of some of the country’s best advisers, he said. “You might have them saying I’ve used [Bruce] Cortesi for years and he’s very helpful and has taken the potholes out of my financial planning road. We need to have those comments coming through to reinforce the fact that advisers are not ripoff artists. David Ross was an accountant, John Milne was a lawyer, there are no Robert Oddys or Murray Weatherstons charging around, flogging people’s money.”

David Boyle, of the Commission for Financial Literacy and Retirement Income, which operates sorted, said it promoted the view that consumers should get financial advice. But he said advisers needed to make it clear what the value of their advice was.

“It’s quite a complex issue, and I have significant concerns that as more people get more money [in KiwiSaver], you’d hope they need advice. Many advisers don’t want to work with such small balances. It’s a bit of chicken and egg.”

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Comments from our readers

On 28 November 2014 at 12:01 pm dcwhyte said:

Good stuff, Fred. I'm sure Robert and Murray are pleased to be confirmed as the paragons of virtue which they undoubtedly are!

There have been a few comments recently about adviser value - this article might help some advisers with the issue - http://www.advisorimpact.com/download/adviser_impact_communicating_value_whitepaper.pdf

On 28 November 2014 at 2:07 pm R1 said:

Surely the people who pay fees to the IFA would expect them to be doing this promotional stuff already rather than waiting for someone else to do it for them?

Recommending individuals is a risky thing to do. David Ross was a good guy according to his clients, until he got found out and they lost their money. You don't know what you don't know about individuals; think famous cyclist and Aussie entertainer with long careers.

On 30 November 2014 at 9:49 am John Milner said:

R1 I'm not sure what IFA fees you pay but mine won't allow the IFA to add much value in promotion of advice unfortunately. Even organisations in the USA struggle to find adequate funding e.g. CFP
I think most of us have high expectations of the IFA but are not prepared to put our hands in our pockets to fund our expectations.

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