Financial advisers and journalists have a lot in common when it comes to public perception. In a recent report by research company brandmanagement, journalists came last in the professions people are least able to build trust with. Financial advisers were rated as the third least able to build trust with, following closely after builders. So believe me, when as a journalist I say to advisers I feel your pain.
Again Fincorp has brought shame on the financial advice community. This is in spite of only one group so far being named as an adviser for the property-based investment group. Fincorp mainly relied on advertising to lure investors. Many of these advertisements were placed in mainstream financial publications, and IFA. Fincorp used to promote its products with slogans such as “Invest with certainty!” and suggestions that investors could “sleep soundly at night”. Australian Consumers’ Association chief executive Peter Kell says those Fincorp sales pitches, halted by ASIC in late 2005, and others like them are clearly marketed in such a way as to encourage consumers, especially older consumers, to believe the products are safer and more secure than they really are. “Maybe we need a clear warning label about risks that should be attached to any ad of that sort,” Kell says.
Unfortunately it’s more than that. Investors need to be financially literate. Until they are, they will never be immune to these pitches. It’s impossible to be educated on all products but success will be achieved if people know when warning bells should be ringing. It’s not about advisers, advertisements or any other spruiking method – but about investors realising that nothing is for nothing and that if it’s too good to be true then it probably is. Meanwhile, it’s a struggle for all of us to keep our heads above the muck.
