Are advisers seen as professionals yet? The short answer, I fear, is sadly not.
Recent research by the Financial Services Compensation Scheme sees trust in financial advisers at a pretty low point, and work that I have been doing for my upcoming PhD thesis indicates several reasons as to why that might be the case.
On the thesis, I am at submission stage, so it is 95 per cent done and I am reasonably comfortable sharing some snippets of my findings at this stage.
First, we know that clients with advisers are richer than those without, and from work by Olshansky and Ricanek as recently as 2020, we know that people with less money live shorter lives and a greater proportion in ill-health.
We, as a force in society, make people's lives longer and healthier – in theory. Getting this right is hugely important.
My paper features a survey of the public in which they were asked to what extent certain dimensions of professionalism had an impact on trustworthiness.
Those dimensions included concepts such as CPD, certification and qualification standards, but also more unusual dimensions such as the concept of corporatisation and whether large organisations dominating the space led to more public trust or not.
On the concept of large corporations, I have putatively found that older men do quite like a large brand in general, but almost every other demographic currently does not.
This is a short warning that the trust that is placed in these large entities may wane over time as wealth passes down the generations. The demographics under the age of 45 seem to actively distrust large organisations.
My work has allowed me to distil down into what I call professionalisation vectors (PV). These are four groups of concepts that when all acting together build trust in a profession in a much more powerful way than if they were acting sporadically, or even against each other.
These concepts are integrity and honesty, confidentiality and transparency, consistency, and serving the public.
The PV most of interest to advisers is the "individual PV", which functions as a code of ethics for any profession. Once you have worked through it, you'll understand what it is all about as there are shades of these concepts in every trusted profession in the country.
Integrity and honesty
Integrity and honesty are, in fact, very different.
Integrity by definition normally includes possessing moral virtues such as honesty, however it is possible for people to appear to be virtuous when being not so.
When considering how honest we've been with clients it is important to consider the problem of lies by omission, which is not telling clients certain facts that are important to their decision making process.
This is a difficult concept to master as it is very easy to mislead by accident, by forgetting to tell a client an important fact.
