Adviser Ratings is a website set up by a handful of finance industry professionals in an attempt to make positive change in making the advice business more transparent and trustworthy in the eyes of consumers by offering reviews and ratings.
Integrity and professional conduct are important characteristics in a financial adviser, but until now, it has been completely hit and miss for consumers – there was no way to get even a small amount of feedback about an adviser before visiting them to hand over your financial future unless they came with a personal recommendation. This has left more than a few consumers with a bad taste in their mouth, or in fact simply without an adviser at all.
While the website may frighten some advisers, reviews are one of the best ways to organically grow your reputation, as evidenced by the huge popularity of online review sites for food, accommodation and entertainment. Perfect reviews aren’t even necessary to increase business, since most consumers understand that things go wrong sometimes, a service was mismatched to a consumer, or staff mishandled a complaint, and when someone has a bad experience, they like to complain about it. Publicly.
What’s new to this consumer service is the ability of advisers to show support for a peer online, vouching for an adviser they respect the work of. This is similar in style to LinkedIn’s endorsement feature, where you can show your support for another person’s services or skills, slowly building a collection of online opinions. Because an adviser who is part of a large licensee has access to a larger number of supportive colleagues, the Vouched For area separates advisers by licensee.
The purpose of this website is to weed out the advisers who may still be doing business, but are known to their colleagues or other industry participants as guilty of poor practices – if someone is willing to put their name next to their adviser or a colleague as a show of solidarity, it certainly counts for something in the eyes of the public.
The site offers comparisons of advisers in five ways: qualifications, compliance, experience, quality of advice, and customer satisfaction. A score is created using certain information, for example the industry body that an adviser belongs to, any action that has been taken by regulators on the licensee the adviser belongs to, and customer ratings.
An adviser must have at least five customer reviews with 75 per cent average or more before the ratings are added to their profile. This actually eliminates the publication of bad reviews, and encourages good reviews to be sought by advisers via happy clients. This avoids the typical problem of a poor experience – for a number of reasons including bad clients – being reported on in damaging language. This way, just the good bits get through, while an empty or low report card might mean a consumer should seek advice elsewhere, or in fact that an adviser should request client feedback using the site.
A 75 per cent score bumps up an adviser’s rating by five per cent, with 1 per cent added per good review after that up until the 20 per cent maximum. There are four ratings categories available for every 10 per cent score cache above 60, with the 91-100 per cent group being the best, and any adviser not part of an industry body having a maximum score of 70.
There are three percentage values that make up the total score, with the industry body adding up to a maximum of 80 per cent, the licensee details accounting for four per cent, and customer ratings maxed out at 20 per cent.
While not perfect, it offers one of the only positive pathways forward for seeking financial advice to date, including the Adviser Register set up by the government, which while helpful in a basic way, doesn’t offer any actual ratings by real people in a review style.