Boutique advisory firm Hewison Private Wealth has reflected on comments made by FSI chair David Murray by reiterating calls to separate an “independent financial adviser [from] a product sales person”.
Hewison Private Wealth managing director John Hewison said recent media coverage of the financial advice industry is making consumers question the integrity of the advice they receive, pointing to recent comments made by Mr Murray.
“With more than 80 per cent of the financial planning community employed by ‘product development’ institutions, the integrity of advice has also been questioned in the media,” Mr Hewison said.
“It is difficult for consumers to distinguish the difference between an independent financial adviser and a financial product salesperson,” he said.
“Legislating the difference of an independent financial adviser and a financial product salesperson through ASIC we can take a significant step forward in improving consumers' understanding of the difference between professional advice and product sales,” Mr Hewison said.
He said that legislating the difference between the two would go a long way to improving the reputation of the industry as a whole and the level of trust consumers have in the industry.
“If consumers want quality financial advice, free from commercial conflict and from somebody prepared to act in their best interests, they must be able to identify the characteristics of an ‘IFA’,” Mr Hewison said.
“A financial product salesperson working for a product developer or financial institution will never be able to truly fulfil the best interest duty as they are undeniably conflicted through commercial interests.
“By providing clarity, individuals can make their own decision about where they seek financial advice, whether it is through a bank or independent adviser,” Mr Hewison said.
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