The majority of Brits do not trust financial advisers according to a survey conducted by advice firm My Pension Expert.
This is nothing new as the poor perception of advisers has been widely reported in the past, and unfortunately the general public often cannot separate the trustworthy and passionate advisers from the firms that sell rather than advise.
This eye-catching headline got me thinking; “who do people trust when it comes to making important decisions about their money”?
Do they trust the big financial institutions, their solicitors or accountant, or their family and friends? If they don’t trust these any of these people, do they trust their own judgement?
It is fashionable not to trust large institutions or banks and this is not surprising when we consider the numerous mis-selling scandals; final salary pension transfers, PPI, annuities and doorstep lenders, to name a few.
But there is a paradox here. People say they don’t trust the big financial brands but they keep on giving their money to them by continuing to bank with them, invest their money with them and buy insurance from them.
There is no doubt that solicitors or accountant rank very highly on the trust scale but although they expert in their own fields they don’t know enough about pensions and investments to help people make the right decisions and of course they cannot give regulated advice unless they are authorised themselves.
Almost all family and friend circles will have a “financial know it all”. A person who is relatively well informed but doesn’t know enough about the complexities of financial advice to make the right decisions. These people mean well but despite their good intentions they could end up losing people lots of money.
If other people can’t be trusted, can people trust their own judgement?
I don’t believe they can and people who think this can end up making serious mistakes. No matter how knowledgeable and much research is done, people are influenced by their own behavioural biases. What may look like a fairly simple financial matter is probably much more complicated and mistakes may be costly to correct, if indeed they can be corrected.
I can give many examples of people who have tried making financial decisions based entirely on their own feelings, instincts and research only to admit it was too complex or emotionally difficult for them.
So, if people can’t trust the big institutions, accountants and solicitors or their family and friends and they cannot they trust themselves, who can they trust?
The answer is of course a person who has years of training and experience, is a good listener and has empathy as well as being highly regulated so the chances of making bad decisions is greatly reduced.
This person is me, a regulated financial adviser. A person who should be respected and trusted.