Yesterday AMP unveiled new plans requiring aligned advisers to be educated to post-graduate level, causing some commentators to question whether the proposed changes will have any impact on conflicted advice.
“It’s all smoke and mirrors,” one anonymous ifa reader posted. “If AMP was truly serious about fixing the perception around professionalism they would open up their approved product list, not force advisers to do more study that the majority don’t need to do.”
Boutique practice principal Matthew Ross of Roskow Independent Advisory told ifa that while higher education standards are always a boost for the industry, it isn’t enough to counteract flawed advice processes.
“So the education will reduce bad advice – like really bad advice – but who’s to say clients are getting put first, which is actually the main thing we want to do?,” Mr Ross said.
“I don’t think the banks should be. Anyone who has a product to distribute shouldn’t be in financial advice, because it’s going to be compromised.”
ClearView Wealth managing director Simon Swanson agreed that lifting the bar on adviser education won’t “stop bad practices” in the industry.
“Consider the number of highly qualified and highly-educated professionals who have been busted for being corrupt and unethical,” Mr Swanson said.
“In addition to raising education standards, dealer groups need to offer more training and professional development support for advisers.
“Institutions are primarily concerned about making sure the dealer group doesn’t blow up, when they should be motivated by a desire to help advisers deliver quality advice that’s in clients’ best interests.”
Similarly, Meridian Wealth Management managing director and principal adviser Paul Dunn said that while AMP’s announcement and similar changes in adviser education standards by CBA are a start, niether measure goes to the crux of the issue.
“You can have the most highly-educated adviser but if the advice process is flawed from the start, the education of the adviser is not going to matter?” Mr Dunn said.
However, other commentators welcomed the move as positive for the industry.
GPS Wealth executive director Grahame Evans said that he believes the changes in education standards by AMP and CBA are an “important cog in the overall search for quality advice”.
“Neither of these actions are likely to put an end to bad advice in the industry but will assist in lifting professionalism in some way,” Mr Evans said.
“The real change comes from clients being empowered to make good financial decisions.”
“Yes, motherhood, but it can only be achieved when clients lift their level of understanding through effective communication by the industry, and dialogue such as is meaningful to both parties, thereby lifting the quality of advice.”
The AFA has also announced its support for AMP’s boosting of education standards, particularly in creating pathway measures for advisers in its networks that do not currently hold a degree.
AFA chief executive Brad Fox said the association will be looking to continue the conversation on lifting the professional, ethical and education standards in the industry through upcoming submissions to the Financial System Inquiry and the parliamentary joint committee inquiry.
“The actions of AMP are a positive trigger to lead the entire financial advice profession further down the path towards professionalism,” Mr Fox said.
NOTE Mr Fox said:
The actions of AMP are a positive trigger to lead the entire financial advice profession further down the path towards professionalism, . The entire financial advice profession!!
A really big call from the AFA chief executive Mr Fox.
Completely out of left field but even so perhaps it isnt enough to counteract the earlier flawed advice processes, before the better educated get to steady the sinking ship.
Or could it be like Michael said Crooks and dopes with better qualifications that will fix the problem. Not seriously likely
More useless quals without addressing the serious issue – ethics
Those of us who write risk want a University level risk only Qual, under the auspices of a University, not the FPA. We don’t want to do more CFP invest units when we advise on risk only and are licenced accordingly
Hmm, is increasing Education standards going to weed out the bad apples in the barrel , of course not. I recall CFP advisers involved in the Westpoint saga in Perth a few years back ,dont recall the exact numbers but a few were FPA members and CFP qualified they still did the wrong thing by their clients !!
Sadly increasing education levels does nothing to stop this sort of behaviour. A more robust compliance system may help, really thios is just a band aid approach to the problem i am sorry to say
I can’t believe the negativity on this. It is a great move. Congratulations AMP. I hope all Licensees follow suit.
One bank lowers or raises interest rates…they then all follow of course. Same thing here. Will they lose advisers or actually gain them? CBA is going pay the education costs…will the others follow…that could be a game changer.
I agree that education standards are not the core issue. The industry is structurely corrupt! Product manufacturers should not be allowed to own advice arms…..but how do you unscramble an egg.
Will current advisers be exempt and grand-fathered out?(pun intended!)
If exempt, how long before the “old guard” who are responsoible for most of the problems in the industry will be gone? Exemptions per se are the reason the industry is in such dissary today. ASIC’s exemption of existing insurance salesmen and automatic elevation to licensed financial planner in the early years are the reason why everyone has to pay now under FOFA. Send them all to Uni, or back to do grade 11 more likely!
Always interested to see the same old self serving agendas come out every time we see a positive step to actually moving the advice industry to a profession.
Yes AMP advisers are conflicted and yes they could have access to a broader APL but increasing the minimum education standards for existing advisers and more importantly, new entrants, will drive its own result. Better qualified advisers will ask more questions of their licensee and will only stay if their licensee listens to them.
Yes Simon, there will still be well educated advisers who are unethical but every profession has those. That is not an excuse to continue to let poorly educated advisers exist as the norm and letting them any where near a client.
I applaud both the CBA and AMP for the steps they are taking and look forward to seeing it embraced across all advice providers – it is well past time we moved past our life agency roots.
Regulation and compliance has increased the costs for advice providers such that average punters are priced out. Is that in their best interest? Ideally everyone would have BMW standard advice – but who pays for it? It would be in the best interests of all car drivers to have multiple airbags and other top of the range features but someone has to pay for it. Is Toyota standard advice ok if it is at least affordable? The higher the cost of providing advice the more subsidisation is required from product manufacturers. Most licensees do not make any money and rely on product margin.
Crooks and dopes with better qualifications, that will fix the problem.
How about simply removing the problem and tell AMP and the like to be distributors or manufacturers of investment product? Then advisers only get paid by the person who they are working for, the investing client.
The focus is once again on education, when at the heart of the matter we are dealing with is CONFLICTS OF INTERESTS FROM ASSOCIATION and lack of INDEPENDENT ADVICE!!! No young person will in their right mind want to spend three to four years at university obtaining a post-graduate qualification to end up selling AMP or any other dealer group’s products under the guise of financial advice. Furthermore, the public are also becoming way too informed today to be fooled by this form of window-dressing.