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ASIC slams advisers for 'woeful' advice

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Australian Broker | 25 Jan 2012, 06:00 AM Agree 0
Financial advisers have been raked over the parliamentary coals by ASIC, which has painted a grim picture of advice quality in Australia
  • Peter | 25 Jan 2012, 10:16 AM Agree 0
    I find ASIC comments disingenuous. They know full well that the content, layout, design and what must and what must not be addressed in a Statement of Advice is fully governed by the Licensee and their Legal Depts. As an Authorised Representative, I get told what to do and if I do something different, then I am in breach of compliance requirements and my Professional Liability Insurance. If the plans are in sufficient or wrong or whatever, then perhaps ASIC should stipulate specifically what needs to go into them and furthermore, I hate getting tarred with this brush when it is out of my control! And ASIC are aware of this! Thanks for nothing!
  • WhistleBlower. | 25 Jan 2012, 10:22 AM Agree 0
    ... and what's so surprising about this?
    I mean seriouisly - anyone older than 40 remembers that prior to being re-branded as "Financial Planners" these guys were called 'insurance salesman' --- you can't just re-brand a whole profession then audit it 15 years later and expect vastly different results.

    The qaulity of advice from Mortgage Brokers far outstrips that of expensive fortune telling with a 'over the horizon' prediction --- and, you can't even blame Financial Planners, it was stupid Government 17 years ago that led to re-paiting the veneer of that industry... and don't forget, we are discussing banks here, the artful dodgers.... they OWN the vast majority of Financial Planning infrastructure, brands, pipeline, compliance, maintenance.... what's the bet ASIC attempts to slight the little guy who's busting his guts and ignore the Mammoths in the room, banks!
  • Terry | 25 Jan 2012, 11:04 AM Agree 0
    I agree with you Whistleblower. I worked for one of those banks. the focus is purely on sell, sell, sell. not on the quality of the advice or the clients needs. it profot before customer. I couldn't work under that ethos.
  • John | 25 Jan 2012, 12:45 PM Agree 0
    This is very disheartening. I have been in this industry for over 25 years as a financial planner (but never as an insurance salesman) and I work long hours for my clients running my own business. My income at best is modest. I do not charge excessive fees but I spend many hours understanding the needs and wants of my clients to make sure what I tell people is both reasonable and as realistic.
    But I am dismayed at what I suspect to be the subjective content that appears to be required by ASIC as to what should and should not be in a Statement of Advice. I am particularly dismayed as to the apparent importance ASIC appears to place on the use of projections that a financial planner should place on them as a reliable determinant in forecasting a client’s future retirement income. Perhaps someone might like to enlighten me as how much reliance is or should be placed on projections. Whilst I use those projections authorized by my licensee I am only too well aware of the downfalls that relying on projections can result in. Using historical or accepted industry expected returns based on asset allocations is at best misleading. There is not enough space here to discuss the shortcomings of product providers including information published and marketed by institutions including the likes of industry super funds which appear to be a protected species.
    Has ASIC been fair in its assessment of the shadow shopping survey. Was the information to be sought by shadow shopper accurately conveyed to all planners and how was this substantiated. This is an industry under siege.
  • Phil | 25 Jan 2012, 12:45 PM Agree 0
    Wistleblower is correct. The other thing that amazes me is the continued performance of some of these products. Super performance the last 10 years, published at growth rates of about 2%. Mortgage brokers who do a client budget, refinance, restructure and allowing clients to purchase investment property do a better job.... and all for free with reducing commissions and now to be anal penetrated by ASIC. Over 11 years my long term clients who have gone down their own property investment paths... traded, developed while reducing their o/o mortgages have done very nicely... thank you ASIC.
  • Dr Phods | 25 Jan 2012, 01:48 PM Agree 0
    Well said John. I too am a self-employed Financial Planner. I have a degree in Econmics, a post-graduate diploma in Applied Financial and I completed the CFP program by coursework (which took two years of heavy commitment. This is more than it takes to become a CA (Chartered Accountant) or even an MBA. I work tirelessly for my clients and I am the one persona in their life that will A) Tell them the truth B) Help them achieve all of their financial and lifestyle goals and C) Give them a better shot at achieving a dignified retirement. Phooey ASIC, the one thing I dislike the most about my industry is trying to comply with the floury rules set down in legislation (in very broad terms)and 'policed' by ASIC. The vast majority of planners in my experience are doing their best. Sure there are some bad apples, but I would suggest there are more Accountants and mortgage brokers in jail than financial planners.
  • WhistleBlower. | 25 Jan 2012, 01:51 PM Agree 0
    PS: To John - sorry for any negative inference John, I know many hard-working honourable folk as yourself (The 'Fee for Service' cohort) and all of you do a stella job (much better than Banks) I just get annoyed when I see ASIC on its high horse rambling on and blaming one small group and then ignore the Mammoths and their own historical role in this --- they (ASIC) sleep with the banking lobby groups, and I am always suspicious when ever I see things such as this, because it usually telegraphs that there's already been a back-room deal done, and now here comes the selling stage where we are all called 'Cowboys' and 'Rogues'.... and then (as always) it eventually leads to re-engineering the legislative framework, that favours Banks and their financial planning Companies -- it's a standard formula Banks use, whereby by 'setting the scene' and 'controlling the narrative' re-sets the chess-board to then push for legislative change... leading ultimately to greater bank market share -- It's just a game to these guys, and unfortunately Public Servants at this level automatically think anyone who's self-employed is a dodgy rogue..... I think the letter 'C' in ASIC actually stands for 'Corporation' and ASIC is now ostensibly in Partnership with Banks... It's an Australian Labor Government initiative.

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