Reply To “The FSA Emphasis On Education Is Misplaced”
Published on: June 7, 2012
Categories – Financial Advice
In an article in today`s “F.T.Adviser”, written by the Managing Director of Yellowtail Financial Planning, Dennis Hall, it is claimed that investors perceive financial education as “a huge turn-off”. Mr Hall takes issue with the FSA`s emphasis on helping financial services clients to learn more about investing, believing the regulator is unhealthily pre-occupied with the Confucian statement: “Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime.” According to Mr Hall, having more information rarely means making better decisions.
It is an interesting piece of sophistry which, if perpetuated, would allow the cosy status quo in financial services to remain indefinitely. I, for one, take the view that ignorance does not necessarily result in bliss.
The following response was therefore made on behalf of money-guidance.com and its followers:-
“A resourceful argument, but one that is prone to flounder (sorry).
It`s a convenient and, to some extent, a self-serving view to contend that retail investors will perpetually be in a financial adviser`s thrall when, for example, online brokerages have been witnessing 19% p.a. compound growth since the credit crunch – suggesting that the writer`s representative sample may not be all that representative.
Investors may not want to get their hands dirty for haddock at £3 per pound but, when the stakes are higher (and the economy is weaker), it seems they will be more inclined to confront the enduring notion of asymmetric information which has formed the basis of many an adviser/client relationship.
In the words of Thomas Jefferson: “If you use your candle to light mine, I get light without darkening you. When I hear your idea, I gain knowledge without diminishing anything of yours”.
Let`s hope there are not too many business plans out there that are predicated on a static consumer attitude.”