Financial advisers have been raked over the parliamentary coals by advice watchdog ASIC, which has released findings painting a grim picture of advice quality in Australia.
In his opening address to a parliamentary committee yesterday, ASIC commissioner Peter Kell said a surveillance operation conducted by ASIC found only 3% of financial plans could be considered 'good'.
Thirty six per cent were considered 'poor' by ASIC, while the remaining 61% were said to adequately meet client needs.
The results refer to a shadow shopping exercise in which 64 plans were sought from Australian advisers, particularly for clients who were in or nearing retirement.
"There was consistent failure by advisers to talk to clients about what they can realistically fund out of their retirement savings," ASIC commissioner Peter Kell said in his statement.
"For example, only a few undertook rigorous retirement income projects and many plans contained woefully inadequate projections, with poor or unrealistic technical assumptions," he said.
Kell said the shadow shop was intended to establish from current retirement advice what good practice was, and as a result, the findings were "clearly disappointing".
The industry ws slammed for handing out too much "generic and pro forma advice". ASIC also noted conflict of interest as a problem, with consumers given products they did not seek or need.
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