I am just as offended as climate change activist Greta Thunberg, and her now famous words keep popping up in my head. But I am not talking about climate change. I am talking about what I am discovering about sections of financial advice.
Like most people who have worked as a financial adviser (yes, the majority), I resent the overreach in legislation that is causing costs to increase, good advisers to leave the system, and everyday people to miss out on advice as it becomes unaffordable.
However, I am now beginning to understand, and at times even sympathise with the actions of ASIC, AFCA, government, mainstream media, and also the consumer organisations.
And that kind of horrifies me.
In my new role after I had to leave advice provision for family reasons, I am educating consumers on how to find good advice, how it works, how to engage, how much it costs, why it costs so much, and what they can get out of advice that will make it worthwhile. This has been my passion for a long time, and I really enjoy this part of my new business offering.
Increasingly though I am seeing the reasons why people don’t trust advice, think it is overpriced, feel ripped off, and hate the industry and think losing the whole thing wouldn’t be so bad.
It is the minority. I still believe that. I have to hold onto that.
I used to read the case studies of advice and see adviser profiles in the industry mags, and wonder why it was considered that what these advisers were doing was so special.
Of course advisers have to meet client needs, be compliant, focus on the whole client and not just their investments or super right? Of course we have to improve their situation, give them high-quality solutions that are not product focused and provide a service that actually makes them better off and be happy to pay for an ongoing service. Isn’t that what advisers do?
I considered that the advisers profiled and the services they were providing were the norm and in the absolute majority, and other than the services provided by some employees of some of the large institutions (who have now been called out) most advice provision was like that, with the occasional “bad apple” doing the wrong thing.
It is not all like that, and we need to act.
I review advice for consumers, and increasingly I am being referred to clients by good advisers who do advice really well, but who are seeing previous “advice” that is not up to standard. When I say “advice” in this sentence, I mean confusing, non-compliant documents, product flogging, fee gouging, unethical behaviour and stuff that are not in any way in the client’s best interests that are being passed off to the unknowing consumer who is desperate for assistance as “advice”.
A year after the Hayne royal commission, this shocks me (and the referring advisers) to the core. Is it any wonder that the complaints industry is becoming bigger than the advice industry?
And when I see this – those words come back loud and clear – HOW DARE YOU?
How dare you do this not only to the people who are paying you and trusting you, but to the rest of the advice community?
How dare you pass yourself off as a financial adviser?
How dare you take money for the templated, unresearched, uncaring rubbish your juniors are producing and you are charging high fees for?
How dare you, and how do you sleep at night?
You are making it harder for every hardworking ethical adviser who is trying to make a difference in their client’s lives. The advisers who put up with the compliance and paperwork, the extra study, and reduced income, and the reputational damage they don’t truly understand because they love helping people and know they contribute.
You are making it harder for every mum and dad, or retiree, or widow/er, or divorcee, or young person who needs help navigating our complex financial systems.
You are making it EASIER for legislators, ASIC, AFCA, mainstream media and consumer groups to justify their criticism and drastic actions. You are helping super funds and direct insurers to flog their inferior intra-fund offerings and insurance products with pre-existing condition clauses as a better option to advice.
What can we do about it? I have been losing sleep wondering about this.
Apart from referring clients to a service like mine, where I can assist with lodging educated, knowledgeable complaints for clients and make sure these “advisers” are held to account, what can you do?
Please, stop being so nice. If you see bad advice or hear about bad advisers from somewhere, you have to take action, not just shake your head and do a good job yourself. Call it out, explain to the clients, lodge a complaint, encourage the clients to act, write blogs or articles for consumers and tell them what they should be getting.
Do videos online, encourage your clients to talk about their good advice. Report it somewhere. You have to prove that you are professionals not just in what you do, but in the influence you are having outside your own door. Some of you are already doing this – thank goodness. But when it is so tough and you are so busy of course it is hard to put effort into this.
All of the good work the best advisers are doing is not going to be enough to save the profession if these other “advisers” keep getting away with it. And if consumers don’t know that the rubbish is rubbish and think that is what everyone is doing and that is what advice is; the situation is not going to improve.
Don’t sit back and let this happen. Your PI Insurance premiums are going up because of these guys. You are being shadow shopped and scrutinised because of these guys. Your profession is considered a dodgy “industry” because of these guys. You are suffering reputational damage and being shamed because of these guys. Direct the legislators the right way to the people who need to be scrutinised.
It is time to act – because of these guys.
Melinda Houghton, financial relaxation consultant, Insider Out
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