Academic attacks use of two-week planners
Financial institutions would be well advised to embed their own staff in the consultancy firms overseeing their remediation process, according to academic Dr Shantha Yahanpath.
In a newly-published paper, Yahanpath has repeated criticisms of the remediation processes put in place by some institutions and his suggestions that some of the people involved in those processes are not adequately trained or experienced.
He claimed one of the leading consultants involved in remediation were using people who had undertaken little more than a two-week RG 146 course to do remediation work without realising the impact on the financial planning sector.
“The end of the remediation programs might be the beginning of a greater problem for the financial planning sector – groups of two-week diploma holders will attempt to join the industry,” Yahanpath said.
“Would we ever trust a doctor with a two-week training? Financial planners are ‘financial doctors’,” he said. “They should ‘diagnose’ the problem areas and ‘prescribe’ solutions to improve financial health and well-being of the client.”
“Financial institutions could outsource remediation programs to consultants and they, in turn, could outsource to recruitment companies and their contractors. But providers (responsible entities) cannot outsource the inherent risks of poor remediation programs,” Yahanpath said.
“The risks are likely to remain with the financial institutions (licensees). Perhaps the time has come to embed respective financial institutions’ staff into these consultancy firms and embark on stricter supervision.”
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
