Reflecting on the news that the adviser register industry working group has begun meeting to discuss the government’s proposal, the co-founders of White Collar Quotes – an online tool that connects consumers to a “network of high quality advisers” – have anticipated the project may not meet its stated objectives.
“This proposed register is a complete waste of time in our view because when push comes to shove, consumers can’t pick good advisers from bad advisers,” said co-founder Josh Golombick in an email.
“The whole CBA scandal has highlighted what we and many have known for years – that good advice is very hard to find.”
Fellow co-founder Greg Einfeld – who describes himself as an “independent planner” beyond his work with White Collar Quotes – said the most common path for consumers finding an appropriate adviser is to go with a recognised brand.
“The big banks and financial institutions have the almighty advertising dollar behind them which coerces consumers to see institutionally-aligned advisers,” Mr Einfeld said.
“While a lot of these advisers still care about their clients, it is very difficult for them to give the best outcome to their client due to their limited product choice.”
However, the latest Roy Morgan survey results suggest a great number of consumers are still confused about the ownership structure of their advice provider.
Meanwhile, AIOFP executive director Peter Johnston has announced he will use his position on the industry working group overseeing implementation of the adviser register to push for an explicit distinction between independent and institutionally-aligned advisers.
The AIOFP has been promoting that advisers work for fee for service for years and not be paid by product manufacturers. It is not a new message and flowed out of it recognising the past potential for conflict where there was possibly skewed advice and the AIOFP for one wants to eliminate it.
Yes it has a collective body, PCM, to help members provide a group opportunity to access investments that require institutional type scale but it is a conduit to investment opportunities and not an investment in itself.
All of this is largely a product of what was considered OK in the past. We no longer generally think it is OK and have been trying to move forward. Blaming people for past behaviour and not giving them the chance to change is not helpful.
Some of these comments are grossly misdirected and you have to wonder where the commentators are employed/engaged.
The register is designed to inform consumers as to who they are dealing with, if they choose to know. If some dont that doesn’t mean others should be denied the opportunity.
Financial advisers are faced with a dual agency role under the current licensing model. They are contractually obligated to the Licensee (80-85% are institutionally owned product providers)to promote the interests of the licensee and they are contractually obligated to the client to place the clients interests first. Conflicts of interest from ASSOCIATION with product sellers is why consumers cannot trust advisers-independent advice is extremely rare under the current licensing model.
Do people really get paid to make statements like an online tool that connects consumers to a network of high quality advisers? Since I, from personal experience, have looked into this financial mumbo jumbo, I say is there any wonder how so many are out of step with the regulator! The big banks and financial institutions have the almighty advertising dollar behind them which coerces consumers to see institutionally-aligned advisers. What an understatement Mr Einfeld! The facts are, its the institutionally-aligned advisers, that along with banks (not only the big banks) have used their influence and power to avoid prosecution. Because of misplaced trust by consumers these rogues have done most damage!
1. Nice comment, however the register is not actually meant to match consumers with advisers – It is so as consumers, if they wish, can check the bona-fides of an adviser. Most consumers clearly won’t but that is not the fault of the register.
nb In my view, the credibility of the AIOFP has nose-dived ever since they started flogging their own product, which is a shame as many members there would like to be perceived as independent. But for those advisers in the AIOFP (and I’m sure its not all of them)that push all their clients into the one product they start to look and feel exactly like the institutions they wish to be differentiated from.
Perhaps Peter Johnston could start by listing the investments that his ‘independent’ advisers use that institutionally aligned advisers cannot.
Do they have exclusive access to the ASX ? Index Funds ? Managed Funds ? And have any of the non institutionally aligned practises have their own fully implemented solution that compromises their advice ? It seems scaremongering and hypocrisy is not just the domain of the industry super funds and labor party.
So the “almighty advertising dollar coerces consumers to see institutionally aligned advisers’. What tish and an insult to consumers’ intelligence.
Perhaps they prefer the security of a large institution rather than a small unknown operator. Horses for courses.
It is true that history repeats itself,so why not check, this was tried in the late 80’s and 90’s to keep an eye on rogue life insurance salespeople selling false hope with endowment and whole of life policies, it led to litigation, slander and allsorts of issues……really? when are we going to consult experienced people on how this sector should be improved???