EXCLUSIVE The government should heed the findings of ASIC’s report on client experience with financial advice rather than “blindly” following the recommendations of the Hayne royal commission, according to a dealer group head.
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.”
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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