Consumer feedback 'good reminder'
Consumer feedback on the development of a new code of conduct for financial advisers has highlighted the importance of keeping a client focus, Angus Dale-Jones says.
Friday, July 13th 2018, 6:00AM 
4 Comments
by Susan Edmunds
Dale-Jones, the chairman of the Code Working Group, said it had conducted a survey of consumers’ experience of financial advice.
That feedback is being used, alongside the consultation with the industry and other stakeholders, to drive the development of the new code.
Dale-Jones said he was pleased with the response, and that consumers had been engaged. There were some themes that had been highlighted as important, he said.
“They are possibly predictable but a useful reminder.”
Clients wanted simple communicate, he said, and for advisers not to make things overly complicated. They wanted a summary rather than a full paperwork dump.
Clients said they expected advisers to look at their whole financial lived when giving advice and expected expert knowledge and for advisers to know their products properly.
“There was quite a bit of thoughtful comment about ethics. People want a degree of neutrality from advisers, so they can give unbiased advice.”
Respondents who had been through the advice process said they did not like a box-ticking approach and wanted tailored service.
“We’ve made the point that we want the code to work for consumers,” Dale-Jones said. “They need something that work for them and means something to them. Customer-centicity is something that the response has highlighted as important. Some things seem very straightforward but are important to consumers. They want to ask silly questions and know they won’t be laughed at.”
The group also held 10 roadshows around the country, attended by 800 people.
There were 160 submissions in the main consultation process, including nearly 2000 pages.
Dale-Jones said about 20% of submissions were from RFAs, 16% were from AFAs, and over 20% were from firms whose services ranged from investment and insurance broking, to investment advice and wider financial planning. Over 10% were from industry bodies or dealer groups, and around 13% were from insurers or QFEs such as banks.
Draft code standards will be consulted on once the Economic Development, Science and Innovation Select Committee has reported back to Parliament on the Financial Services Legislation Amendment Bill.
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Comments from our readers
Neutrality is variously described as impartiality, lack of bias, lack of prejudice, objectivity, open-mindedness, disinterestedness, even-handedness, fairness, fair-mindedness, detachment.
A Nom Rep retained by a VIO cannot possibly display the remotest semblance of any of these definitions.
It's now time surely to recognise and acknowledge that VIOs are Sales Organisations and do not operate in the Advice space.
I don't advocate their prohibition or dis-integration but placing them in the same overarching category as Financial Advisers which FSLAB does at present, puts the consumer at a disadvantage in seeking to make an informed judgement.
Adviser earnings are regarded as a key element in providing the consumer with information to make an informed judgement - the status, drivers, and functions of the VIOs should also be made clear to consumers.
By having the Nom Reps of a VIO subject to the new Code of Conduct, they are being granted de facto status of an Adviser.
By all means include VIOs in FSLAB but a separate section needs to be developed and devoted to the VIO in order to protect consumer interests effectively.
One reported result seems very odd to me, and flies in the face of my experience - "Clients said they expected advisers to look at their whole financial lives". I don't reckon that's what consumers do in practice - they most often want a current topical issue dealt with (not the whole 9 yards) much in the same way as we visit our medical GPs.
I reckon in their dogged adherence to their view that are regulating a service, and their fixation on consumer orientation being a key element, CWG is trying to merge in the one place what in other professions and industries cover in two -
(1) the providers' Code of Conduct and Professional Standards (whatever it is called); and
(2) the consumers' Code of Rights.
I don't think CWG have a dog's show of pulling that off - but maybe someone can point to some other disciplines where that approach has been successful.
I struggle to understand how any adviser who is employed by a manufacturer offering any form of neutrality that doesn't reward their master. Common sense confirms that statement to be an oxymoron.
It would also be interesting to learn from those advisers at the coalface, what proportion of their clients want to spill their guts about all of their financial "lives". I'd suspect the "real" response is closer to zero - although in full disclosure: I'm not an AFA and wouldn't know.
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Let’s summarise the position : Mr Dale-Jones acknowledges the need to “keep a client focus”. We also know that vertical integration is a flawed business model from the perspective of consumers and that neutrality is a deal breaker for vertically integrated organisations. Therefore the other obvious question we should be asking is “as the Code Committee is dominated by employees of integrated organisations why haven’t the non-conflicted members, including possibly Mr Dale-Jones, resigned in protest at this farce given the need to keep a client focus.”