Speaking exclusively to ifa, Lifespan Financial Planning chief executive Eugene Ardino said every government member that is going to have an impact on the reshaping of the advice industry/profession needs to read ASIC’s Report 627, Financial advice: What consumers really think, and take notice of it.
Advised clients had a more positive experience with advice
In particular, Mr Ardino highlighted the finding from the report that people who received financial advice in the last 12 months were most positively disposed toward financial advisers, held greater levels of trust and confidence and expressed more positive associations with financial advisers than the rest of population.
Further, the report found that advised clients were nearly four times more likely than all Australians to say that they had “a great deal” of confidence in financial advisers (39 per cent compared with 11 per cent) and nearly three times as likely to have “a great deal” of trust in financial advisers (36 per cent compared with 14 per cent).
Similarly, research from ifa and Momentum Intelligence found that 94 per cent of advice clients said they were satisfied with their financial adviser.
ASIC findings should guide government policy
Mr Ardino said the government is embarking on a regulatory road map that will decimate the number of advisers and dramatically increase the cost of advice.
He added that the government should take note of the information that’s come out of the ASIC report, which is built around a rigorous scientific method.
“I did read the explanation as to how they try to make sure that the sample was appropriate and meaningful, and that it’s good that they went and got an external research organisation to go and conduct this so they could make sure that the sample was reasonable,” Mr Ardino said.
“We’ve got to listen to this because this is the only information we have. ASIC has said they’re going to do a follow-up piece of research in the next couple of years, but I think that’s got to be expedited to be done much sooner because we should be taking note of information like this before we go down the path of reshaping the industry to become a profession that nobody can access.”
Hayne royal commission was ‘very one-sided’
Mr Ardino also suggested the government should not blindly follow the recommendations of the Hayne royal commission which he said “was very one-sided”.
“They’ve demonstrated in a number of ways that they probably don’t understand the industry. Let’s face it they’re a group of lawyers,” he said.
“I think you’ve just got to look at real-life data and experience and be guided by that. In an industry that services a couple of million people, you can find a couple of hundred cases of bad advice.
“There was some bad advice highlighted, but a lot of what was highlighted was poor corporate behaviour and greed, and not necessarily greedy advisers but greedy organisations running the advice business.”
Further, Mr Ardino pointed out that having a consumer that is more engaged with the economy and engaged with their finances is good for everybody else.
“It’s good for the country. It’s good to have people that are economically and financially literate,” he said.
“I think it would be just downright negligent for the government not to take notice of the information that’s come out of this report and relook at their regulatory reform agenda.”
It looks like the accountants exemption might be coming back. The IPA has been talking to the government about relaxing requirements for accountants to be able to give holistic financial advice. The government is apparently giving serious consideration to the proposal. This is not fair on financial advisers. Accountants should have to adhere to the same regulatory standards as Financial Advisers if they want to give financial advice.
An excellent article and a very good report from ASIC which demonstrates what we all know but clearly not the politicians who do not need to get financial advice themselves and find blaming others including advisers and the poor decisions of previous politicians much easier. The solution is clear, let advisers do what they do best which is give advice and deliver it without compliance overkill and ensure it can be done cost effectively for people who need it.
Terry McMaster, where are you? the industry needs you back and your leadership.
miss ya,
ex-dova aR
Great summary of the issues Eugene. Clearly laid out so even a non fp industry person can understand. Maybe even a lawyer and a politician?
Wish you had a bigger platform than just as a dealer group head.
As for the ongoing comments by some people responding to this piece about industry association efforts, they are either not reading alternate viewpoints to the AFA/FPA propaganda or they are choosing to pretend that there is not an alternative association to be a member of.
There are many in the industry lobbying govt including the AIOFP, and even a trade union. However they need support of the thousands of lemmings who still pay big associations to represent them while preserving their insto benefactors interests and education fee generation machines.
[quote=Danny]Ethics and trust were huge mantras for the RC. Hayne rightly blasted several FSC members for their disgusting ethical behaviour, particularly AMP and the ilk. Guess who has to do an exam and an Ethics Unit – wait for it, wait for it – ADVISERS! Yes that’s right, 30 year advisers with zero complaints and zero PI claims who craft out an honest living by looking after the financial affairs of their client base in their hour of greatest need. The former and current FSC member execs on $2M – $12M per year parasites who have overseen the greatest sales race to the bottom are exempt.[/quote][quote=Danny]Ethics and trust were huge mantras for the RC. Hayne rightly blasted several FSC members for their disgusting ethical behaviour, particularly AMP and the ilk. Guess who has to do an exam and an Ethics Unit – wait for it, wait for it – ADVISERS! Yes that’s right, 30 year advisers with zero complaints and zero PI claims who craft out an honest living by looking after the financial affairs of their client base in their hour of greatest need. The former and current FSC member execs on $2M – $12M per year parasites who have overseen the greatest sales race to the bottom are exempt.[/quote]
So where are our industry association “leaders” on these matters???
The mortgage & finance and general insurance industry bodies have taken action and lobbied effectively, on behalf of their members!
We all know the truth yet the Politicians and ASIC seem to think differently.
The only way is to band together and fight back! I hope to God that the AMP advisers and their class action gets up and smashes the hell out of AMP and those executive scum bags lose their jobs!!!!
Also, the ARC High Court Challenge, everyone needs to get on board and stand up for our fellow advisers, many of which bought GF clients relying on the previous advice from Australian Solicitor General and the Labour government when it was deemed that GF commissions ARE property! Even the banks relied on this legislation to lend on this GF revenue….
Stand up and support ALL Advisers! https://arcfund.com.au/
It is insane that Hayne and the regulators who are not in advice relationships and have no experience of advice relationships have been allowed to dictate the regulation on how we should treat clients. The voice of our clients and of the advisers that have looked after them for over 20 years has not only not been heard but hasn’t even been requested.Clearly the poor behaviour of some has been assumed to represent the whole industry and used to destroy the industry. When are the numbers of job losses caused by their actions going to be reported. We have had a thriving industry that has been cannibalised by overegulation due to the ignorant,bigoted view of a few. Why has there been no accountability for the basis of the recommendations they made and the implications of these recommendations ? When are we going to have the opportunity to have a Royal Commission into lawyers and be given the same opportunity to use examples of their poor behaviour to change the rules for their whole industry. eg fee caps to address exorbitant hourly rates that the client has no control over, outlawing of no win no fee parasitical behaviour where the lawyers receive the majority of the proceeds of the claim,family law cases that are strung out to feather the nest of the lawyers ?
if you want CEOs, managers etc to complete FASEA and ethics, start educating your local member in droves. Only way they will listen and YES I agree that anyone in control above advisers MUST do the same as us. hammer the local member enough and something may just happen. Remember, the time extensions were NOT just a result of FPA/ASA etc, it was an army of advisers taking control of getting the message across.
Ethics and trust were huge mantras for the RC. Hayne rightly blasted several FSC members for their disgusting ethical behaviour, particularly AMP and the ilk. Guess who has to do an exam and an Ethics Unit – wait for it, wait for it – ADVISERS! Yes that’s right, 30 year advisers with zero complaints and zero PI claims who craft out an honest living by looking after the financial affairs of their client base in their hour of greatest need. The former and current FSC member execs on $2M – $12M per year parasites who have overseen the greatest sales race to the bottom are exempt.
What Government to make sensible recommendations and reduce red tape masses of BS regulation.
Actually listen to adviser clients and their positive experiences.
TELL HIM HE’S DREAMING !!!!!!!!!!!!!
PS – Vertical Integrations of Advice and product is the single biggest problem in the Advice industry over the past 20 years and remains so. Did the Government / RC have the balls to tackle that – no as the Banks and Institutions pay far too much in donations to cop real solutions aimed against them.
PPS – FARSEA needs to apply for All Govt Pollies, All Govt Agencies CEO’s & down to Mngrs of ASIC/ ATO/ APRA/ AFCA, etc, All Bank CEO’s & down to Mngrs, All Life Insurance CEO’s & down to Mngrs, All Super Fund Trustees & down to mngrs, All pathetic Adviser & Industry organisations CEO’s & down to Mngrs like FPA / AFA / FSC.
And Finally FARSEA needs to Apply to the FARSEA board – Full disclosure of conflicts of interest, Full self compliance with the FARSEA rules.
And we dam well all know All of the above need to do ETHICS courses. As all these Morons above led to the poor results of the RC.
This is the problem with RC’s. They get to hear a select group of horror stories and extrapolate it to mean that must be what is happening to client out there. Then you get a regulator who decides what advice clients are seeking and how they want it presented to them rather than asking the client what they want.
come on.. that is just too sensible for our high quality political parties to understand.. what hope do we have when ASIC are too stupid to understand
yeah well eugene – the pollies take advice from treasury etc