The industry has criticised the Money Advice Service (MAS) chief executive's recent comments, saying she is worried about the ethics of financial advisers, as "unfair" and "threatening to undermine the hard work the sector is doing to overcome mistrust".
The Personal Finance Society (PFS) and online simplified adviser Wealth Horizon dismissed the sweeping comments made by Caroline Rookes at the Labour Party Conference on 23 September, which questioned adviser ethics and suggested the regulator should be tougher on them.
According to reports, Rookes acknowledged advisers have a role to play in delivering the government's pension reforms but said she is "worried about [their] ethics" and the Financial Conduct Authority (FCA) may need to be "tougher on them to ensure they are doing what they should".
PFS chief executive Keith Richards said the comments were "inappropriate and disproportionately negative" and "dis-serve the general public's best interests", potentially further deterring them from seeking advice.
Disproportionately focusing on negative outcomes risks dissuading the public from arriving at the right decisions
"A lot has changed over the last few years, especially from a professionalism perspective, and it is time that more balanced comments were made by key figures and consumer-facing groups to reflect the true picture," he said.
"Distorting the facts, or disproportionately focusing on negative outcomes, risks dissuading the public from arriving at the right decisions. That threatens to undermine the hard work the sector is doing to overcome the mistrust that blighted its reputation in recent years."
Wealth Horizon chief executive Chris Williams said it was unfair to collectively question the ethics of all financial advisers but pointed to a "degree of historical context".
He said: "The industry cannot deny that it has alienated many investors in recent years. People have been voting with their feet, even though it may not have been the best route for many of them to take.
"The Budget pensions reforms mean that advice is certain to move higher up the list of priorities for many mass market consumers. As such, there is a real need for the industry to demonstrate its trustworthiness by serving the best interests of consumers rather than the other way round."
Adviser complaints
Complaints against advisers have been consistently down.
The Financial Ombudsman Service (FOS) reported a fall in complaints in September, when only one advice firm received more complaints than in the previous half year.
