Former Victorian premier Jeff Kennett has warned citizens to avoid financial advisers that charge product commissions and has hit out at the government’s FOFA amendment agenda.
In a strongly-worded opinion piece published in Melbourne’s Herald Sun newspaper, Mr Kennett said that while “most financial planners [he knows] are honest operators” that the industry is plagued by conflicted remuneration models.
“No system is perfect and the investor must accept responsibility for how they invest,” he wrote. “But they are entitled to honest advice that does not place them at extraordinary risk. For that reason I cannot understand the latest changes to the Future of Financial Advice laws just passed by the federal government in the Senate.”
The chairman of mental health charity Beyondblue and former Hawthorn Football Club president called upon investors to be aware of the business models their advisers are operating under and to vote with their feet.
“Ask advisers if they are getting commissions or bonuses for the products they are offering you,” Mr Kennett instructed readers.
“If the answer is yes, find another adviser. All fees, charges and any commissions or bonuses relating to your investment should be disclosed to you. Many financial advisers have stopped taking commissions or bonuses. They charge a fee, which is fine, but commissions and bonuses should be banned.”
He also suggested raising minimum adviser education standards and bringing the ‘Series 7 Exam’ – a qualification administered by the US Financial Industry Regulatory Authority (FINRA) – to Australia.
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