Financial advisers, promote yourselves

With Bernard Madoff serving as the poster boy for the ugly side of the financial services world, now is the time for the financial advisory industry to band together and launch a national awareness advertising campaign.

With Bernard Madoff serving as the poster boy for the ugly side of the financial services world, now is the time for the financial advisory industry to band together and launch a national awareness advertising campaign.

I wrote about this idea two years ago, and it is time to revisit the concept.

A positive image for financial advisers is obviously a key issue given the tons of negative press generated by Mr. Madoff’s alleged $50 billion Ponzi scheme.

Let’s accept as a given that most professional providers of financial advice have failed to explain clearly what they can and can’t do for consumers. Add the Madoff scandal to this base of misinformation and ignorance, and you have a recipe for a public relations disaster.

The average investor, who now more than ever needs a financial professional, may never use a financial planner or investment adviser given all the attention the Madoff scandal is receiving. In fact, post-Madoff, there are 50 billion reasons why consumers won’t trust anyone offering to handle their finances.

Despite their reluctance to trust an investment professional, too many consumers nevertheless are fiscally clueless and shouldn’t go it alone. As I have urged in the past, the financial advisory industry would do well to create a national ad campaign that focuses on a basic guide to personal financial advice.

The slogan could be: “Got advice?”

Consider a recent poll conducted by InvestmentNews in which advisers were asked: Are you worried that the reputation of financial advisers has been tarnished by the $50 billion fraud allegedly carried out by money manager Bernard Madoff? A resounding 68.7% of the 1,015 advisers said yes.

Additionally, those same advisers were asked: Do you believe the Financial Planning Association, the National Association of Personal Financial Advisors or other industry trade groups should step up their efforts to project a more positive image of advisers in light of the scandal involving Mr. Madoff? Drum roll, please: 86.3% said yes, they were looking to industry groups for support.

For this reason, it is important for all financial services industry associations, including the FPA, NAPFA, the Financial Industry Regulatory Authority Inc., the Financial Services Institute, the Securities Industry and Financial Markets Association, the American Bankers Association and the various insurance associations, to partner in creating a national ad campaign to help educate consumers and gain their confidence.

However, the Denver-based FPA has “no organized public relations campaign in response” to the Madoff matter, InvestmentNews reporter Bruce Kelly wrote in a story that appeared in the Jan. 5 issue.

The matter “seems more of a public relations problem for the [Securities and Exchange Commission], not financial planners,” the FPA told him.

“The Madoff scandal raises awareness of the differences between true financial planners and those who use the term” without proper credentials, intent or ethics, FPA executive director Marvin W. Tuttle Jr. told Mr. Kelly for the same story.

I couldn’t agree more with Mr. Tuttle, whom I know and respect, and it is for the very differences he highlights that a national campaign for consumers must be developed and spread on television, the web, radio and in print.

As the FPA and the Certified Financial Planner Board of Standards Inc. of Washington think that financial planning and the code of ethics that CFPs follow are the way to meet consumer needs, the two groups should feel confident leading the charge.

The emphasis should be on the value of obtaining professional financial advice, whether from a financial adviser, financial consultant, financial planner, registered investment adviser, wealth manager, private banker, broker or insurance agent.

The “Got advice?” campaign should emphasize that hiring a trusted financial professional is critical to an investor’s long-term fiscal health and success — and that the Madoffs of the world are the exception, not the rule.

Jim Pavia is the editor of InvestmentNews.