AFA CEO Philip Kewin has lashed out at critics of the financial advice profession, telling the FSC Leaders Summit that industry executives, politicians and other naysayers need to become better informed.
Speaking on a panel at the 2017 FSC Leaders Summit yesterday, the former Zurich executive, who was appointed to the top job at the AFA earlier this year, was asked to discuss the issue of trust in financial advice.
Mr Kewin said he had experienced examples of people discussing the “poor quality of advice” in Australia without possessing knowledge of what an adviser does, how they are remunerated or what their processes involve.
He revealed he has also had discussions with political figures who must vote on issues affecting the future of financial advice but lack knowledge of the industry.
These issues, along with a concerning tendency for advisers to be blamed for failures occurring further up the financial services chain are major barriers preventing the industry from building trust, Mr Kewin said, adding that executives who co-ordinate product distribution and manufacturing should have minimum education levels.
Discussing one of the FSC Summit sessions he attended Mr Kewin said, “It was quite clear to me that one of the speakers didn't actually understand what the rules are around remuneration for advisers and around whether advisers receive commission on investment products.
“That really concerns me because collectively we are responsible for the trust in this industry and if we don't know, ourselves, what the rules are and how advisers are being paid, how advisers are being qualified and then go and talk about the ‘poor quality of advice’ in this country — then we have a problem.”
“Maybe there should be a minimum level of education for executives who are running distribution and manufacturing so that everyone actually understands what the rules are in terms of what advisers do, how they are paid, how they go through the process — everything.”
Mr Kewin also referenced a recent meeting he had in Canberra with new members of parliament.
“One of them said to me: ‘We like to think we know everything about everything but we don't. So If something comes up on financial services and we need to vote — we’re not educated and we don't really know what we’re doing.’”
Mr Kewin said the new members of parliament he spoke to were enthusiastic about having advisers or constituents they could turn to for education about the industry.
“More often than not clients are really happy with their adviser and they're more than happy to refer their adviser,” Mr Kewin said.
“It’s just the people that are lobbing grenades from the outside that have never seen advice that think advisers are very nasty.”
Greater responsibility must be taken by the broader financial services industry, Mr Kewin said.
“Trust is not just the responsibility of financial advisers - everyone in this industry, in this profession is responsible for trust,” he said.
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