Industry needs a national awareness campaign

Professional providers of financial advice have failed in helping the public understand what they can and can’t do…

Professional providers of financial advice have failed in helping the public understand what they can and can’t do for them.
With so many consumers in the dark and in need of fiscal assistance, the financial services industry needs to create a national image advertising campaign that focuses on a basic guide to personal financial advice. The slogan could be: “got advice?”
Other industries have created awareness programs to inform consumers of the various virtues of their respective industries.
Look no further than the “got milk?” campaign, created for the California Milk Processor Board in Berkeley and jointly funded by America’s milk processors and dairy farmers, or the Des Moines, Iowa-based National Pork Board’s marketing campaign, “Pork: The Other White Meat.”
In an effort to convince consumers to “Go RVing,” the Recreation Vehicle Industry Association of Reston, Va., launched an ad campaign that blends old-fashioned family values with new technology.
An integrated effort among organizations with an interest in the recreational marine industry is promoting the boating lifestyle and experience with the “Discover Boating” ad campaign. The campaign looks to build on the brand awareness.
Milk? Boating? RVing? Besides health, what is more important than a person’s financial well-being?
The shift from defined benefit pension plans to defined contribution plans places much more responsibility squarely on the shoulders of the average employee, who probably lacks financial savvy.
These people need help and need to know where to get it.
Therefore, it is essential for consumers to understand fully what the various financial professionals out there can do for them.
For this reason, it is important for all financial services industry associations, including the Financial Planning Association, the Securities Industry and Financial Markets Association, the National Association of Personal Financial Advisors, the American Bankers Association and the various insurance associations, to partner in creating a national ad campaign to help educate consumers.
Since the FPA and the Certified Financial Planner Board of Standards Inc. believe that financial planning, and the code of ethics that CFPs follow, are the way to meet consumer needs, the two Denver-based groups should feel confident to lead the charge.
The emphasis should be on the value of obtaining professional financial advice, whether it comes from a financial adviser, financial consultant, financial planner, registered investment adviser, wealth manager, private banker, broker or insurance agent.
The public-awareness campaign should stress that it is critical to an investor’s long-term fiscal health and success to hire a financial professional.
What’s more, given the recent legislation on retirement, everyone involved in the financial services industry needs to enroll businesses in the education process to ensure that American consumers understand why they should participate in these different financial vehicles and to sort out which ones are the best investment options to achieve their goals and objectives.
Clearly, financial professionals have failed to communicate an important message to the general public. Case in point, InvestmentNews recently conducted an investor focus group titled “As the Mass Affluent Approach Retirement: Opinions of Retirement and Retirement Income Planning.”
In general, there was a lack of understanding about the need to use a financial professional. There was also a great deal of skepticism.
“If you’re reading BusinessWeek, and some of the other financial publications, you’re getting information there. At the end of the day, what am I going to pay someone to do, give me a hot stock tip?” said one investor in the focus group.
Another said: “I’m wary that financial planners have any competence, that they really know what they’re doing. They don’t have what I have financially, and yet they’re telling me, ‘Here’s what we suggest.’”
Additionally, some of the consumer panelists have a lack of trust, believing that advisers and planners don’t truly have the client’s best interests at heart.
Some panelists think that it is difficult to choose a financial professional, because there is no “yardstick” to gauge competence. In addition, many in the focus group thought that financial advisers, planners and brokers used a formula-driven approach, not personalized.
All this illustrates the misconceptions about using a financial professional and an overall lack of understanding.
It is time to move consumers out of the dark. All financial-advice providers (and financial services product suppliers) have a role to play in helping consumers define and reach their financial goals.
They also have a basic responsibility to join together to ensure that consumers understand the benefits of the financial advice that is readily available to them.