In her first major speech to the financial services industry, during the FSC and BT’s political breakfast series yesterday, Ms O’Dwyer outlined its “financial system program”, which is in response to the recommendations of the Financial System Inquiry.
As part of the program, the government will raise professional, ethical and education standards for advisers and product providers which, in turn, will ensure consumers “receive fair treatment”, she said.
“These higher standards will place financial advice on a similar footing to other professions and, in doing so, increase consumer trust and confidence in the sector,” Ms O’Dwyer said.
“Subject to transitional arrangements, advisers will be required to hold a degree, pass an exam, undertake continuous professional development, subscribe to a code of ethics and undertake a professional year before they can advise clients.
“I appreciate the FSC’s ongoing engagement in this space and I thank the FSC in advance for continuing to progress this reform. This will be vital to ensure that industry continues to work together and with government to establish an independent standards-setting entity which the government will recognise in legislation,” she said.
Ms O’Dwyer added that the government is taking measures to ensure consumers “receive fair treatment from advisers and the providers of financial products and services” by addressing remuneration in the life insurance sector.
“As part of our financial system program, we have adopted the final industry reform proposal which I announced earlier this month to improve the long-term sustainability of the sector while at the same time better aligning the interests of advisers, insurers and consumers,” Ms O’Dwyer said.
She added that the government’s financial system program overall sets out a “blueprint” for how Australia will respond to challenges and opportunities within the financial services industry over the coming years.
It’s not that you’re unethical JulieM, it is the environment you work within is unethical and has very evil motives.
I look forward to the day where you realise that working external to the bank is an option.
[quote name=”JulieM”][quote name=”Wildcat”]Rob, the bigger crooks are the banks. If the bank planners were truly professional they would have resisted the financial incentives and employer pressure of the bank programs however the banks sales channel view of planners is also largely to blame for the current poor state of affairs.[/quote]
Again, Wildcat, with the ‘bank planner bashing’? If we were “truly professional” we wouldn’t want to make a living? Do you find it inconceivable that someone could take care of their clients, meet Best Interests Duty, and earn an income? Do you run your business at a loss?
You may not like vertical integration, but your views that bank planners only use in-house product and place the interests of their employers ahead of themselves is an outdated piece of claptrap.
Ever thought that not everybody is in a position to be self-employed, employed in an IFA or unemployed? Perhaps I just want to do the job I love, for my clients who I love, without constantly being attacked?[/quote]
You’re totally missing the point, not Your totally missing the point.
Felt the need to point out the irony of basic 101’s.
[quote name=”Patrick”]Your totally missing the point im trying to make there are some financial planners who are lacking the basic 101’s of finance/economics, my clients dont care about brond pricing lessons either but they are comfortable knowing that i fully understand it. Just like i dont care about how electricity works but i do want my electrician to fully understand that.
You can have the greatest people skills in the world but if you don’t understand the basics of finance/economics you are not going to be getting the best outcome for your clients.
People skills are no replacement for understanding the fundamentals of Finance/economics, im sick of hearing old Financial planners always saying that their people skills make up for their lack of knowledge its just an excuse so they don’t have to increase their knowledge and understanding stop being lazy improve yourself for the benefit of your clients.[/quote]
[quote name=”Wildcat”]Rob, the bigger crooks are the banks. If the bank planners were truly professional they would have resisted the financial incentives and employer pressure of the bank programs however the banks sales channel view of planners is also largely to blame for the current poor state of affairs.[/quote]
Again, Wildcat, with the ‘bank planner bashing’? If we were “truly professional” we wouldn’t want to make a living? Do you find it inconceivable that someone could take care of their clients, meet Best Interests Duty, and earn an income? Do you run your business at a loss?
You may not like vertical integration, but your views that bank planners only use in-house product and place the interests of their employers ahead of themselves is an outdated piece of claptrap.
Ever thought that not everybody is in a position to be self-employed, employed in an IFA or unemployed? Perhaps I just want to do the job I love, for my clients who I love, without constantly being attacked?
I am going to have to agree with Patrick on this… I know a FP who has 25+ years experience and is CFP (grandfathered).
He doesn’t understand how a TTR strategy works… Only recommends stepped premiums and same cookie cutter 30 day wait etc.
He is applauded by his dealer group for being so successful and bringing in plenty of $$$. He just simply bought books previously and tacked on large advice fees and never spoke to clients again. Funnily enough that is what opt-in is trying to stop but his whole book is grandfathered.
I guarantee if he needs to get a degree he will sell his business and exit the industry.. Hopefully it’s the case.
Your totally missing the point im trying to make there are some financial planners who are lacking the basic 101’s of finance/economics, my clients dont care about brond pricing lessons either but they are comfortable knowing that i fully understand it. Just like i dont care about how electricity works but i do want my electrician to fully understand that.
You can have the greatest people skills in the world but if you don’t understand the basics of finance/economics you are not going to be getting the best outcome for your clients.
People skills are no replacement for understanding the fundamentals of Finance/economics, im sick of hearing old Financial planners always saying that their people skills make up for their lack of knowledge its just an excuse so they don’t have to increase their knowledge and understanding stop being lazy improve yourself for the benefit of your clients.
I used to think I was special for having a degree once too. I’d say your clients would be suitably impressed by your bond pricing capability, but I don’t think a planner would come from this angle. I think a psychology degree is nearly as relevant as a finance orientated degree as a financial planner as we deal with needs, goals, and emotions. Without the right people skills, all the theory in any textbook is misplaced. My clients don’t care for bond pricing 101 lessons, they just want to know they are making the best efforts they can for their future selves.
Long time over due all the negative comments to these changes are from financial planners who have never done a bachelors degree and have done the absolute minimum requirement of a Diploma of Financial Planning. To the comment that having an MBA wouldn’t make much of a difference you are completely wrong. I was talking to a financial planner who had done the bare minimum of a Dip financial planning and he didnt even understand the inverse relationship between the price of a bond and its yield thats so incompetent and ignorant, but i was talking to another financial planner who had done honours in a bachelor of commerce degree majoring in economics and finance and he understood that immediately because he had learnt about that in his 1sy year of his Bcom degree
Rob, the bigger crooks are the banks. If the bank planners were truly professional they would have resisted the financial incentives and employer pressure of the bank programs however the banks sales channel view of planners is also largely to blame for the current poor state of affairs.
I have never read so much dross in all my time in the industry . You could have advisers with MBA’s and you wouldnt get a much different result . Fund managers ( read banks ) will continue to fleece the consumer , advisers will continue to sell overpriced managed funds that arent in the clients best interests and markets will continue to go up and down . The time and money that has been spent over the last 10 years on policing advisers would have been better spent by implementing a financial literacy course in our high schools to make the future investor smarter , instead of flogging the advice industry into a near comatose state
While it would be nice to finally be recognised as a profession, I think the short term effect will be mistrust to all advisers for the behaviour of a few.