Until we start actively culling advisers who aren’t worthy of their clients' trust, we’re just kicking the proverbial can down the road.
I can honestly say that I love what I do. My co-worker, Julian Nowland, and I happily spend our time catching up with clients, solving problems on their behalf, and working on our business.
That passion steers us in the right direction and helps us make good choices at every turn.
Exceptions, not the rule?
Unfortunately, I can’t say the same about everyone in the industry - which I’ve been defending for as long as I can remember.
I’ve even put my job and career on the line to stop what I saw as an adviser systematically targeting the vulnerable.
I told myself he was an exception, not the rule.
More recently I’ve been helping clients fight the major banks over the shocking advice they have provided - which in some cases has adversely affected a client's life forever.
Again, I told myself these were exceptions rather than rules, that things have changed a lot since these scenarios happened and that a new breed of educated and ethical advisers will change the financial planning world forever (which we are slowly trying to do).
With a relentless mainstream media campaign against financial advisers reaching its crescendo, surely there was a vested political interest intent on destroying the planning sector once and for all, right?
Despite all this, nothing has really changed.
Which is why, instead of just greeting a new client with “Hi, I’m Josh. How can I help?”, I spend the first 10 minutes acknowledging the presence of the poor, conflicted and uneducated advice being offered in Australia.
The “financial advisers” next door
A group calling themselves “financial advisers” moved into our building recently.
They moved out as quickly as they moved in, but for me they were the straw that broke the camel’s back. I discovered that they would cold-call working class victims (who can ill-afford to make the wrong move), lure them into their office and then subject them to high-pressure sales tactics about Victorian residential property.
The whole thing left me feeling dark and jaded — even more so than before.
In the age of CERN’s particle accelerator, nanotechnology, drone warfare and the Back To The Future hoverboard, how can the most vulnerable members of our society still fall victim to these financial scams?
I guess as humans we’ll always be susceptible to being sold the next great “get rich quick” scheme because we hope the person offering it will have the golden goose that will solve all our problems.
Hope is a powerful drug. And dishonest people know this all too well.
What can we do to rid ourselves of these “advisers”? What proactive steps can we take to eliminate the threat before it becomes a reality? I tried to contact the Australian Securities and Investments Commission (ASIC) about it, but I couldn’t find the right path to go down (assuming there actually is one).
I’m sorry, but a financial adviser register will do absolutely nothing.
ASIC is currently undertaking its first action against a licensee in Melbourne for not acting in their clients' best interests.
The group seems to be a mirror image of our former neighbours and so we’ll be watching on with interest.
Personally, I hope ASIC gives every like-minded firm in the country a serious warning: “Take this profession and your clients's welfare seriously, or go back to selling used cars.”
My anger is no longer directed at those trying to discredit our profession, but rather at the profession itself.
Until we all start actively culling those who aren’t worthy of their client’s trust, we’re just kicking the proverbial can down the road.
What needs to happen
In my mind, a few things need to happen:
- The government, the regulators, our professional associations and our licensees need to give us all the permission (and the right) to start a financial adviser cull;
- The government needs to make residential property a financial product;
- ASIC needs to devote a considerable amount of its additional resources targeting/monitoring those businesses with their own Australian Financial Services Licensees (which all of these advice businesses described above hold); and
- We need to start the financial adviser cull as soon as possible.
And if that means conducting a royal commission into the banking industry, so be it.
Joshua Cratchley is the co-founder of Plenary Wealth
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