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.
Politicians are good at politics. Hence there is a an industry of lobbyists to get their agendas met. Sadly the best lobbyists will win rather than common sense. The sad reality is that the adviser lobbyists became politicians at the expense of the people they should be representing.
Good article Phil…..’a minimum level of education for executives who are running distribution and manufacturing’. Now there’s a thought. 90% of the wallys you deal with from institutions and dealers have no experience as practicing planners. The other 10% tried it and seemed to quickly realise there are much ways to make a living (explosives expert…much less risky)?
Phil for PM
Thank you Phil. Finally a voice the industry needs. Re assures my faith in the AFA. Not sure about the FPA. Now for that issue of both the AFA and FPA receiving subsidies from the FSC. Me thinks, its time to rethink this. Sever ties with the FSC please AFA. We as advisers are fed up and we will always be blamed for the FSC members incompetence. Enough really is enough. Our industry will face the begin of a crisis from 1st January 2018 and this will continue. Experience will be lost. Clients compromised and face turning to instos for advice. Advisory firms owned by instos and essentially to hell with the consumer. This is not right. As an adviser and a proud one at that, I say to hell with the instos. Lets do more for the client and maybe we can have 4 in 5 clients visiting an IFA, one that is truly acting in the interests of their clients. Education alone won’t be the answer here. Lets make this happen Phil…..thank you
So IFA perhaps you should complete a survey of ACTUALLY how many top executives have the qualifications to understand financial planning
Then you will see the REAL issue
Pragmatic comments from an industry leader, promoting our industry. When was the last time the FPA promoted the industry in this way, so many missed opportunities. Advisers need both industry bodies singing from the same hymn book.
The FPA have successfully marketed their overpriced courses as the be all and end all of advice. They have turned the industry into a joke. The FPA has basically said to the public and our governemnt that ALL FP’s are bad scoundrels unless they are CFP. You a complete joke FPA. Im not sure if the industry will ever recover from this relentless campaign and its resultant high cost of operating as an adviser AND being compliant. What a complete joke this industry is now.
you will see a mass exodus of advisers from 1 Jan 2018. Oh I know, competition in the industry is not ASIC’s brief. It should be, we are the only form of competition for the big institutions. God help the Aussie battler.
Well spoken Phil the AFA getting back on track !
Good words but its too late. The FSC is a corrupt organisation, only interested in profit at the expense of customers and advisers. But the unfortunate truth is that they are still the paymasters of the AFA and FPA. Until both bodies stop accepting payments from the FSC members whatever they say will be irrelevant.
If the FSC and insurance / bank execs had the same education and remuneration standards imposed upon them it would decimate the numbers of the same execs. And until ASIC start holding the same execs responsible the scandals will never stop.
While I agree that the AFA & FPA are clearly hamstrung by the FSC and instos… I cant help but feel we’re a bit hypocritical.
We complain that the AFA & FPA are conflicted because they receive payments from instos/product providers… We then say that us receiving commissions for insurances from product providers is not conflicted…
Im not sure that is what we are saying…I am saying that the payment is conflicted, however so is charging a fee for service(That could actually become a fee for no service if the client is unable to attain cover). I am saying that a commission is quite often in the clients best interests.
Thank you Phil – well spoken. When misinformed people state as facts things that are incorrect, they need to be publicly called out else they keep repeating wrong statements till everyone else thinks they are right.
The public somehow need to be made aware of how the unnecessary regulation that ill informed politicians put in place costs them more ultimately. And how they are being misinformed by vested interests – this needs to be called out loud and clear. No one really cares about advisers and their businesses but surely someone needs to care about the Australian public?
Bravo Phil Kewin! Bravo!
Its so comforting to know you’ve stated your views on this is such a public forum. Kelly O’Dwyer (aka Judas) should take note of your comments and hang her head in shame in how she’s treated advisers.
Love it Phil…..well done and thank you!
He’s off to a good start. It should be compulsory for anyone working in management in the industry have an adviser or have been through the advice process.
You have not quite gone far enough with your comment.
Charlie Bell started at McDonalds age 15. His first job in the shop was to clean the toilets. Age 36 Charlie was the international president. Great man, great management / training story.
The problem with the industry is obvious in my view. If you have not spent at least 5 years in the “field”, do not go into management. You simply have no idea what is like to be at the “coalface”.
Congratulations Phil and great to see the AFA getting on the front foot. Trust is hard to build and the FSC’s continual attack on the advice profession vs accepting responsibility for their own failings, provides the smoke screen that has confused our policy makers.
The FSC agenda is diametrically opposed to a strong independent financial segment. Politicians need to understand this as mistakenly they see the FSC as a voice for advice when it is simply a product revenue channel representing its shareholders.
the FSC [b]AND[/b] ASIC, with ASIC in my view doing the most damage to the adviser. I believe they have it in for the small adviser (because they are tarred with feedback from the big end of town lobbying). A regulator should be trying to restore public confidence in the industry. Look at their conduct, it is [b]not[/b] conducive to building trust. Their conduct, if they were those of an individual, would be similar to a sociopath. They have complete and utter disregard for the emotional (and other) rights of financial advisers
Well done Phil. Better late than never from the AFA, This is the voice we needed before ridiculous legislation was put through.
If Brad Fox had defended us like this we may have had a better outcome. And he is right, local members of parliment had no idea what they were voting on, and when they were informed correctly O’Dwyer shot them down in the party room and rammed the legislation through
Nice job Phil, but I get the feeling it’s “too little too late”…if your really want to help you can start lobbying to stop Shorten and his merry band of Union cronies from absolutely destroying our industry.
Well spoken Phil, the AFA on the comeback trail.
Thank you Phil.
Congratulations Phil, and well said. More strength to your bow and that of our AFA. Sadly the days when just a few execs in insurers HQ had adviser experience are long gone. I can think of a dozen execs or so who I would like to get alone for a “briefing “
Hear Hear. This message is long overdue and needs to be reinforced again and again. The hand grenades and performance comparisons are often made referring to rules that have long been changed ( eg commission on investment products ) and cherry picking super performance comparisons which fail to acknowledge the cheaper retail options via MySuper. The voice of successful advice practises and their clients is never heard so the argument that advisers aren’t trusted is reinforced by misinformation. We should rally behind Kevin and stand united rather than pushing vested interests which are divisive
This is what our Associations should be saying, long and loud. But also congratulations to Philip Kewin for trying to get the message out to those who matter, which has always been our challenge.
Good on you Phil for standing up for the majority of advisers who are honest and do act in the best interests of their clients. It’s good to see politicians being honest too with regards to their ‘education’ (or lack thereof) of the industry. However it’s also scary that the vote of one or two “uneducated” senate representatives have the power to destroy the livelihoods of those simply trying to make a livelihood out of financial planning. And before the “commentariate” start, no I’m not trying to make excuses for the bad apples in the industry, but as we know the majority are the innocent. It just seems that increased regulation seems to be the answer for almost everything these days (not just financial planning), which makes processes more complex and costly than they need to be, and this negatively affects the service consumers receive and the price they pay for that service.
Well said Phil. It is about time that someone stood up and said how it is instead of meekly standing by and letting misinformed people with their own agenda own the debate.