ASIC shadow shop results highly preliminary
The financial services regulator has released highly preliminary and broadly negative figures from its financial planning shadow shop exercise at the Parliamentary Joint Committee (PJC) hearing, having given only 24 hours notice to the industry of its intention to do so.
The Australian Securities and Investments Commission (ASIC) revealed to the PJC that, of the 64 plans provided during the shadow shop exercise, more than a third were rated poor, 61 per cent were rated adequate, and only three per cent (two financial plans) were considered good by the regulator.
ASIC Commissioner Peter Kell said conflicts of interest remained a problem in the financial planning industry and that too much "generic advice" was provided during the shadow shop, which focused on retirement advice.
Money Management understands that the financial planning industry received just 24 hours notice of ASIC's intention to release preliminary results of the shadow shop survey, with the Financial Planning Association (FPA) being invited by the regulator to provide pro-bono advice to clients who may have been affected by the financial advice provided during the exercise.
Both the FPA and the Association of Financial Advisers (AFA) have participated in the shadow shop survey, but have not yet received the final report.
The FPA general manager for policy and government relations, Dante De Gori, said the figures released by Kell at the PJC hearing "underscore the critical importance and the need to continue raising professional standards, which we have been advocating before."
"If anything, it strengthens our argument of restricting the term financial planner," De Gori said.
The AFA chief executive officer Richard Klipin said the association was looking forward to seeing the final report from ASIC.
"The numbers are not flattering and demonstrate that the financial advisory profession is still on a journey to improving their offer to consumers," Klipin said.
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