Crisis Boosted Advisors' Reputations, Say Almost Half Of IFAs - Survey

Wendy Spires

7 December 2009

Much has been said about the erosion of trust in the financial services industry following the cataclysmic events of the financial crisis, but according to a recent survey by Nucleus Financial almost half - 48 per cent - of IFAs believe the crisis has had a positive effect on advisors’ reputations, while just 4.8 per cent thought that there had been a negative effect.

Last year’s investment losses will still be a raw memory for many clients and some will no doubt be disappointed with the service they received. But equally, many have noted that the crisis gave firms an opportunity to demonstrate superior service levels – in keeping clients well informed with timely and transparent reporting, for example.

“While 2009 has certainly been a challenging year for all in the financial services sector, those advisor firms which offer a transparent, customer-centric service will continue to thrive as clients seek the best advice to guide their financial decisions,” said Nucleus founder and chief executive David Ferguson.

“In this respect the financial crisis, as well as the impending Retail Distribution Review, have been very positive catalysts for genuine change and an overall improvement in industry standards.”

The RDR, a programme of reforms for the investment advice industry, was designed by the Financial Services Authority to restore clients’ trust and bring up standards of advice. In addition to making IFAs be clearer on just how “independent” they are, the RDR will oblige all advisors to be qualified at QCF Level 4 by the end of 2012.