Labor backs adviser ratings websites

Shadow Treasurer Chris Bowen has endorsed the development of private sector financial adviser ratings websites, as a second product of this kind is launched to the market.

Yesterday, the ‘Adviser Ratings’ website went live – an initiative launched by a company of the same name which is a corporate authorised representative of AFSL holder iPraxis – with 16,000 financial advisers already listed on the website and awaiting consumer ratings and feedback.

The launch follows a similar initiative within the Westpac/BT Group on Monday with the release of the ‘Adviser View’ portal, which allows consumers to publicly rate their experience with the bank’s financial advisers.

Addressing media delegates to the AFA conference in Cairns yesterday, Shadow Treasurer Chris Bowen listed the advent of consumer ratings websites in the financial advice industry as an example of technological change that the industry should embrace.

 

“Anything that promotes transparency and allows good financial planners to provides the ability for consumers to say what a good planner they are is good for the sector,” Mr Bowen said.

At the same time, however, Mr Bowen said a consumer ratings function may not be an appropriate add-on to the government’s own proposed adviser register, saying these websites should be led by the “private sector”.

Meanwhile, the team behind the new Adviser Ratings website has made clear its intention is to help raise public confidence in the financial advice industry, not diminish it further.

“At the moment, as the FSC says, the industry is cactus. There is no confidence. There are a whole lot of people who refuse to engage, who need a planner but are not using one,” Adviser Ratings spokesperson Christopher Zinn told ifa.

“So it is in the interests of the good and better planners to differentiate themselves in the market in a way which consumers can understand.”

Mr Zinn clarified that the advisers listed on its website will have the ability to opt out, but encouraged the industry to examine the potential benefits of participation.

“We want this to be like TripAdvisor, where advisers ask their clients to put in comments about them because they see the benefit,” he said.

“To be absent from the service might cause clients to ask, ‘why is that the case?’

“The industry is not in a good place at the moment; it needs to make some changes, it needs to realise that this kind of rating and review service is coming. It's not just us, there will be others.”

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