Lack of clarity hindering financial advice reputation

59% of brokers surveyed at today's Financial Reporter Scottish Lending Event in Glasgow believe there is a lack of clarity about how financial advice is paid for.

This week the FCA announced that it was launching a market review, in part due to concerns that parts of the market had 'poor treatment of consumers' and 'misleading or confusing communications', including around the cost of advice for consumers.

Although 86% of brokers believe consumers trust the advice industry, some brokers said there is still a lack of transparency in certain sectors.

Additionally, some said they feel a negative perception of the industry remains from years ago, while others were concerned that commission is still seen as the main driver of recommendations.

When asked what barriers exist to making advice more available, increased awareness of the benefits and better signposting to advice services were tied as the top answer, with 59% of respondents supporting these initiatives.

41% believe more clarity around pricing is the answer to improving accessibility, while 18% said pricing should simply be cheaper.

Just one respondent said that regulation was hindering the advice sector.

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Financial Reporter editor, Rozi Jones, said: “Despite an overwhelming majority of brokers saying that consumers trust the industry, it is clear that more can still be done to improve access to advice.

“The sector has done a lot to improve its image over the last decade, but consumer concerns clearly remain about pricing transparency.

“Respondents to today’s survey supported better signposting towards advice, as well as simpler and cheaper pricing, but significantly, brokers didn’t consider regulation as a major barrier to offering advice.

“It will be interesting to see the results of the FCA’s latest review into the advice sector and how well it believes the market is working, as well as any recommendations that could further widen access to advice for consumers.”