In a statement released today, ISN chief executive David Whiteley said the guidance released by the Australian Securities & Investments Commission yesterday, which clarified grandfathering arrangements for the ban on commissions, will help remove conflicts of interest in the financial advice industry.
“These key documents…will allow the financial planning industry to progress towards being recognised as a true profession,” Whiteley said.
“The draft regulations strike a good balance between allowing an appropriate transition for the financial advice industry to comply with the Future of Financial Advice reforms, while ensuring that all new financial planning clients will be afforded the higher protections that the reforms have been put in place to deliver,” he added.
“The [financial advice] industry’s transition to professionalism requires advisers to adopt charging practices which ensure no bias.”
The statement indicated the superannuation industry body will make a formal submission to Treasury supporting the draft regulations.
See ASIC 017029159. The “glass houses syndrome” is alive and well. Where is IFS’s professionalism and conflict of interest? makes good reading.
Ken, Steve and others. Product sellers / floggers are not planners. Planners are paid for strategy and advice on more than just their super and are entitled to be paid. Yes, get rid of the ones there to make money without due care for the client. Enough of the crap going to and fro, doesn’t it make sense to work towards a unified approach and a level playing field
Well said Ken! Most if not all IFA’s just size up every client that walks through the door. Every client needs a $2000 fee floating over their head for the to just keep the doors open. Every IFA is suffering the cost of this ridiculous compliance overkill & a slave to pointless paperwork. If your an honest adviser like me and every adviser i know this is abwaste of resources. Maybe the solution is no paperwork, charge way less tothe client, seen more clients, actually help people instead of turfing them out due to cost(or overcharging them). Play up, do the wrong thing & get banned (like our drivers license). Rip off a client & refund the money from assets. No assets? No license. Simple. Cowboys out.
I have followed this debate with interest, like the one started by Wayne Legget 15/2/13. Many of the IFA comments about industry fund advice offerings are simply incorrect. How can so called IFA’s continue to claim that industry fund advisers are simply flogging product when in the main IFA’s do that every day. Wayne himself explained that to be paid for his advice he had to switch a cients super fund and sell insurance for a commission. Alternatively, most industry fund planners are approached by current members to get advice on their existing interests in the fund which is often much more credible than many of the offerings IFA’s have sold to consumers in the past : Westpoint, Trio, and funds that became frozen on retail platforms as examples. I will finish by saying when IFA’s stop flogging product we can all then benefit from changes to onerous SOA requirements that I agree are ridiculous.
In some dealer groups SoAs are 10 pages. But those with a vested interest in 80 page SoAs as being the only way to provide advice wield the power.
Great points and comments Truth Hurts & Gerry & some others here. The industry needs a massive change & I think very client and every adviser would benefit from Gerry’s & truths suggestions on is planners seeing far more clients and charging far less for doing real work. Pretty simple, the bad eggs would just get weeded out very quickly if ASIC and the regulators focused on real world issues rather than education & buzz words. Things have got to change urgently.
In a perfect world Truth Hurts…won’t happen while this bunch of regulators and other parties of dubious intent are feeding off the industry like pigs at the trough.
Imagine if SOAs were 10 pages and called “Your Financial Plan” and the fees were tax deductible…well, that means a heap more people getting affordable advice and advisers not getting swamped with red tape.
Get the eftpos machine out…..next please…
It’s really the way it should be, but it’s now way way too complicated. The lawyers and business consultants and dealer groups and fund managers…they all gotta get paid too Truth Hurts.
Soa’s should be 10 page simple plain english docs & should cost the average client/retiree $550 to $1000 max & take less than 30 mins to an hour to produce with a 1 hour meeting either side. Anything more & your no better than the rouge selling westpoint or the greedy storm adviser. This industry is a joke. Why should clients pay service fees to you the adviser when all you do is farm it out to a fund manager. Your ripping them off, plain & simple 90% of the time its just commission in disguise. Stop this circus of soa stealth & huge fees. Financial planners are right up there with the bernie maddoffs of the world. Zero credibility – the industry needs a good clean out of fee chargers billing clients too much for what you all know is a service most of your clients can do without. Truth hurts. Que the linkedin buzz words……
marshall
its easy, union = no rules.the sooner the rules apply to ALL advisers and in this case-truth hurts- is either a stirrer or one of the protected industry(union) breed where there exits 2 sets of rules.I really would like to think that ASIC has or will remove this practice-if it exists
Perhaps if ‘Truth Hurts’ so passionately believes that improvements need to be made, and transparency levels increased, it might be nice if you actually used your real name. Whilst you are it, it might be nice if you could demonstrate how you run your practice without compliance documents or the necessity of charging advice fees?
truth hurts hey cupcake, the idea of advice and being responsible dictates communication which is verifiable, objective and unbiased and to be relied upon. if your dealer relies only on phone calls being monitored, then the whole idea of credibility and integrity has been lost. enjoy the union roll and hopefully your idea of professional advice exits at the next election. Hopefully there will never be an industry lawler or accountant or doctor.
Oh oh….touched a sore nerve with the emporers wearing new clothes out there. We need less of this circus called compliance and FAT files full of useless & pointless paperwork & be able to provide advice quickly, honestly & at a reduced cost. You are all fully aware that a multi thousand dollar “soa” fee, implementation fee, engagement contract etc etc etc is just commission in disguise. Hence why this FP industry is the joke & untrusted profession it has turned into. And before all you cliche linkedin buzz word quoting barrow pushers rant on about how great you are & how wonderful our industry has evolved, the problem isnt bad advice its the rougue adviser, hiding within the rules, hiding within the soa & false promises. No amount of education will solve this. You need a new playing field & what it is now & post fofa isnt the answer. Less fees, less paperwork & advisers audited on every call by their dealer – yes it can be done efficiently.
If you leave valuables out in the open, this creates opportunity, and theft is opportunistic. No temptation, no opportunity, no theft.
If Sony offer electronics salesmen 15 % commission, and other companies only offer 10%, many salesmen will recommend the Sony. (It’s human nature)
If commission based advice stays (and it won’t) the salesmen planners will recommend products with the highest commission.
Other planners with integrity are judged by the actions of the greedy. The whole argument is moot, as commissions will disappear for all products other than risk products, and these may yet go.
Terry….to become professional one acts in a professional manner with ethics and a social conscience. I’ve said it before, how one charges does not indicate professionalism.
As far as i can tell most planners are already transparent with their fees and possible conflicts….more transparent than the mysterious ISN. True independance… it’s a pipe dream, the banks own 80% of the advice channel and that looks likely to grow as IFAs get squeezed out. None, i repeat NONE of the reforms mention anything about fostering a culture of independance. In fact, i would suggest ASIC prefers the institutionalised ownership model. Sad but true.
I don’t know why Whiteley’s comments have drawn such vitriol and name calling. Attacking the person, and not the comments, smacks of emotion rather than reason.
Regardless of his title, he has made valid comments about the lack of professionalism in the planning industry.
To become professionals, we need a better formal education prerequisite, true independence, (and this includes Whiteley) and advice that the client needs, not what will line our pockets more.
Unless and until everyone grasps this concept, the profession will lack trust. Only complete transparency builds trust.
I will bet that Mr Whitely will pull his head in after the rebuttal of his strange comments. If he does not desist from such silly comments then he must have very tough skin and an addled brain.
Also Mr truth hurts has given us a new way to spell “Vultures”. It’s now “Vulchers”. I thought only Shakespeare had the licence to do this and remain unscathed.
Truth Hurts does have a valid point about the compliance and SOAs….with all the extra rules and regulations one would think they could now relax the requirements for onerous SOAs given we are all supposed to be working in the client’s best interest and managing conflicted remuneration etc.
Why the need to continue with this big disclaimer discloure document that contains maybe 2 to 3 pages of the actual advice? Well i already know the asnwer….it’s in case you get a complaint and the lawyers and FOS hook into you. You need to prove your innocence or you get found guilty.
truth hurts
you are obviously an uneducated person and just probably a salesperson without the knowledge to understand what and why we do. yes there were advisers in the past who reaped and pillaged-history. get your facts correct and work in a compliant manner- any one from any continent can give verbal advice on anything-sounds just like you
He is spot on in the main. Financial planners have all been overpaid vulchers for decades. They still overcharge and act like vulchers today but its all ok now because they all it “fee for service”.
Same game different name. Not untill we can give quick verbal executed advice without this compliance rubbish & soa circus can we call our industry a profession. You all know you overcharge for the same groundhog day advice, day in day out. You all pretend its hard so yiu can charge accordingly. Truth hurts guys n gals. Change or get sacked by your clients.
Whiteley, you have become irrelevant and nobody cares what you say.
80% in growth assets
20% defensive=Balanced Fund in ISN terms
How does the Regulator allow this?
Go back to school Whitely you fool
Pot calling the kettle black? ISN’s owned by unions run by unions for the benfeit of unions and by default Labour = unequivable BIAS Whiteley, yours NOT IFA’s. Lack of a level playing field is what hurts Australians Whiteley, dishonesty in your advertising & spending $30 MILLION of MEMBERS funds to benefit who exactly??? Pull your head in!
Bias means you only sell one product = industry fund adviser. Conflicted means your licence does not permit any other recommendations = industry fund adviser. True professionalism = means you actually provide detailed individual financail plans and not generic and pre-produced financial plans = industry fund advisers don’t do this. Higher protections means not investing 80% to shares, hedge funds (sorry ‘alternatives’) automatically, nor counting property and infastructure as defensive assets, and providing details on actual underlying investments = yet another fail for industry funds. How many advisers are taken to the Ombudsman because of underlying investments, yet how can they automatically invest in hedge funds when clients join. How many clients today ask about risk, rather ISN has encouraged a ‘it’s only about fees’ approach. I’m glad the Government will address all these issues with FOFA……ummmm…
[i]The [financial advice] industrys transition to professionalism requires advisers to adopt charging practices which ensure no bias.[/i]
So Mr Whiteley can I assume that in a post FOFA world I (as an independent holder of an AFSL unaligned to any product maker or financial institution) will be able to draw on an ISN member account to collect a Fee for Advice? Or will this only be available to your “non conflicted” ISN Financial(product pushing) Planners”
Well, we’ll, well. When the industry funds play on a level field they can make a comment, things like real valuations not historical to wrongly value assets and give a false return are just one contentious item—- deny that one. Financial planners and accountants in the main are professionals operating without bias on a disclosed fee for service. Get your facts right first
David Whiteley and the ISN have no interest in advancing the professionalism of financial planning. They have trashed financial planners for the last decade to win market share and they embarass themselves by employing in-house, totally conflicted ‘financial planners’ to flog their products.
They old saying you pay for what you get. So when industry based member finds that they are under insuranced & have not contrubuted enough into super had the wrong risk profile. Had no strategic tax planning, wealth creation No advice. Who do you sue? or well there is always centrelink. As their TV advert “- They will look after you??
I find it interesting that a body that is entirely conflicted and bias has the nerve to insult the IFA’s. Industry super funds can only recommend industry super funds, if that’s not bias, then what is?