by Susan Edmunds
A recent Ministry of Business, Innovation and Employment survey found only just over half the consumers who offered input on financial advisers felt confidence in their professionalism and integrity.
Janine Scott, director of financial planning at Massey University, said there was a big problem of a lack of understanding about the industry.
She said consumers were largely unaware of advisers and those who knew about them were confused and overwhelmed by what they were told, such as about the different adviser designations.
"I sincerely believe that a public awareness campaign may be a partial solution to promoting adviser services," she said.
"The CFP board in the US has launched a public awareness campaign over the past five years and knowledge and recognition of CFP professionals now surpasses that of other financial professionals, even CPAs. Of course, the CPA board has a lot more resources than the professional bodies in New Zealand. But over the past few years, even on social media platforms I see CFP ads."
Blair Vernon, director of advice and sales at AMP, said there was not a lot of point in an education campaign until it was known what changes were to be made to the Financial Advisers Act.
He said it would be hard to get any traction with a campaign if it was to be bogged down in discussion of the differences between an authorised and registered adviser, and someone working for a QFE.
"I'd question whether that would be a case of throwing good money after bad decision-making... you're hoping for a miracle if you want people to understand the current regime."
He said it would be beneficial for the industry to have a single regulatory standard for issues such as disclosure.
There would then be potential for a campaign that informed consumers of what they should expect from an adviser in terms of transparency and disclosure, he said, which could work to build consumer confidence. "That depends on whether we get a consistent benchmark in terms of disclosure, conflicts of interest.. that is as critical as whatever the designation is."
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