Advice industry 'trench warfare' scaring consumers

Financial planners need to stop fighting “trench warfare” over different models of advice before it drives away the consumer, according to the managing director of Snowball, Tony McDonald.

Speaking to Money Management, McDonald said the infighting in the industry, coupled with government intervention in super and financial planning, was creating too much confusion for the consumer and driving them towards their own solutions.

“There is a real danger the consumer is watching all this trench warfare, and the Government is throwing up more confusion some days, [that] consumer will turn around and say [that] it is all too hard [for them to deal with],” McDonald said.

Consumer interest in ‘value for money’ products, or transparent solutions such as direct shares, property and self-managed solutions, was rising as consumers became more aware of the different investment options and became more sceptical of the industry, McDonald said.

Snowball’s consumer research had also shown that the level of consumer distrust towards advisers, public sector funds and industry funds was the same, proving that the consumer was not being affected into the industry’s arguments between industry funds, retail funds, and financial planners, he said.

McDonald said the industry was being distracted by infighting, when the consumer was simply interested in getting value for money for financial solutions.

“You can have all this noise among the industry’s protagonists, [but] at the end of the day the consumer is sitting here and thinking that they want value for money and to see and understand what they are getting,” he said.