In its annual survey of 6,561 international Chartered Financial Analyst charterholders, the CFA Institute found a marked increase in the number of respondents who believe “mis-selling” by financial advisers is the “most serious ethical issue facing the local market in the coming year”.
Almost half (48 per cent) of respondents gave this response – up from 36 per cent last year, indicating the issue is a growing concern for these stakeholders.
CFA Society Australian spokesperson Jason Chesters said the results indicate CFAs are not convinced the Future of Financial Advice reforms are achieving their aim.
“Our Australian members are showing increasing concern that the [FOFA] reforms have yet to address the issue of mis-selling by financial advisers,” Mr Chesters said.
“This is perhaps exacerbated by indications that the new government will change ‘best interest’ provisions as part of the roll-back of FOFA.
“We acknowledge the government’s desire to reduce red tape but encourage it to implement policy that improves Australians’ access to high quality advice that is in their best interest.
“A strong foundation in ethical principles and standards is essential across the financial services industry to regain the trust of investors, but perhaps no more so than in the provision of advice.”
Wait on……..
This is an odd beat-up. A GLOBAL survey of “charterholders” (with a small fraction of those being Australian in a global organisation) were asked whether mis-selling in the “local market” was an issue. NOT the AUSTRALIAN market- just the respondents local market.
How this is twisted by the Institute into a condemnation that is specific to Australia beggars belief!
A vested interest group that purports to occupy the high moral ground thinking that all the rest of the industry was evil—- perish the thought!!!!!
My wife just asked me if “miss-selling” is a financial services euphemism for STEALING… I had to say “yes”! Part of ethics is calling things what they are. When advisers sell stuff that benefits them rather than the client (whether out of ignorance, or deliberately) it amounts to (here’s another euphemism) missappropriation of fund. Let’s get with the program, IFAs and ALL start doing what is best for our clients – hey?
I am taking part in ASIC’s FOFA survey. This is good information for misconceptions by “alleged” industry “Protectors”. A client, reading this may think that this article justifies “something” I seem to have missed it. How many clients see CFAs for financial planning?
Without in any way seeking to deny we have a few well known churning advisers and their fellow-traveller insurers,who are these guys.
Are their Australian “members” accountant types ( no twisting here )or investment advisers with a few term policies a year.
Unless you ARE A FULL TIME RISK ADVISER YOU HAVE NO CREDIBILTY IN THIS SPACE
Most advisers have always acted in good faith, and we did not need the attempt at codifying “best interests” to tell us how to do our job.
FOFA was always about one thing-make it difficult for advisers to move funds from the ISN. Its just that risk advisers as usual were colateral damage.
We now spend hours justifying a recommendation to cancel an old NRMA term policy with non-competitive premiums, even though the sum insured has doubled, it is now in a split premium arrangement, and trauma & TPD have been added, and none of these features are available because its a legacy product.
Mmmmmm interesting. Accountants pile their clients into agri-business,SMSF, GSI,Chatwell and the like. Then when the proverbial hits the fan, the financial planning industry carries the can.
May be the CPA’s should clear out some of the skeletons in the closets of their Ivory Tower before making such statements.
At least Financial Planners have to document and justify their advice and are held accountable for it…….
It was because I did not use an adviser that I was not negative but positive by 12%
Wow, these analysts who don’t talk to the clients, don’t spend time with the clients, somehow know that we are mis-selling to these clients. The world has changed and so have the clients needs and objectives post the GFC. Are these the same people that celebrate that they had a good year when the beat the index by 3% (negative 17 instead of negative 20%.