Adviser Ratings is reforming its scoring system; as a result of which, one-third of advisers can expect to have their badge downgraded.
The independent financial adviser ratings agency will now incorporate qualifications, relevant association memberships, experience and the volume of consumer reviews in its ratings for advisers.
Commenting on the changes, founder Angus Woods said the new scoring system is squarely in line with the industry’s professional evolution.
“Consumers are increasingly demanding transparency from advisers about their education, professional commitments and experience, but it’s still hard to access that information in one place,” Mr Woods said.
“While ASIC’s Financial Advisers Register (FAR) lists some professional information, our analysis has shown an alarming number of advisers have out-of-date listings about their association memberships.”
According to Adviser Ratings, 9 per cent of advisers who said they were members of the Financial Planning Association were not current members, while 13 per cent of listed SMSF Association members did not have an active membership.
“The Hayne royal commission showed all Australians how important trust is in financial advice, but unfortunately, not all advisers are giving consumers an accurate picture of their professional memberships,” Mr Woods said.
He noted that advisers wanting to improve their ratings have a number of available options including completing a FASEA-required qualification, joining a “tier one” professional association, completing CPD requirements and encouraging clients to leave a rating.
Successful and Professional Advisers don’t appear on “Kitchen utensils” rating sites…..You’ll recall Storm Financial Advisers all rated highly on Adviser ratings too. There is also no legal requirement to lodge your education levels or industry association membership with ASIC…When there is a Doctor rating site I’ll be persuaded otherwise.
Until all ‘ratings’ are 100% from verified actual clients and not someone who was told “sorry we are full and cannot serve you at this time” why would any professional advise feel the need to be rated…especially if your practice is FULL of extremely happy clients. We only have so many hours in the day!
This is great news, I have satisfied the new FAESA requirements (FAESA Exam and Education requirements) back in 2019/2020, but as a new adviser in 2016 I am still graded below peers who I know have no intention of even sitting their FAESA exam by December this year….. misleading to consumers as come December those advisers are gone and the adviser has/is selling their book of clients. Clients are seeking long term financial advice so I think this change is going to be a great thing for clients.
Shannon, technically the adviser is not gone by Dec this year as they have until September next year with the FASEA exam, if failed twice leading up to Dec 2021. The FASEA exam does not necessarily give you better qualifications in this industry, unfortunately. Cheers