Consumers still wary of advisers
Independentratings company Adviser Ratings claims almost a third of planners have noticed a change in business volumes since the release of theAustralian Securities and Investments Commission(ASIC)/Australian Consumers’ Association (ACA) report into the quality of financial advice, with 67 per cent of these noting a decrease in business.
The findings were revealed in a follow up survey of 400 respondents from the same sample as the initial survey, which canvassed the opinions of about 700 planners in February.
The survey also showed significant changes in advisers’ time allocation during the period between surveys, with 94 per cent of respondents spending more time on existing client service and communication, and 89 per cent spending more time providing comfort for existing clients.
There has been a corresponding decrease in time spent on both new client interviews and plans (58 per cent) and on marketing for new prospects (52 per cent).
Adviser Ratings chief executive David Child says: “This dramatic change in time allocation basically says that further down the track for those people who need new business, it’s going to get tougher rather than easier”.
Since the ASIC/ACA report’s release, 43 per cent of advisers surveyed had reviewed or audited their practice and procedures, with 27 per cent making changes. Only 28 per cent had initiated contact with clients regarding the report.
On the issue of future industry actions to improve the quality of financial advice, such as moving to fee-based remuneration, improving policing and prosecution, and raising the entry level for financial planners, the results were consistent from February to April.
“You’d expect a change to take place during the cooling off period, but there is a groundswell of frontline opinion which recognises that these actions are important, so I find it encouraging that there hasn’t been a major shift in opinion,” Child says.
Recommended for you
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments for investments.
Inefficient data processes and systems mean advisers are spending over half of their time on product implementation and administration at the expense of clients, according to research.
With the regulator announcing its enforcement focus for 2025 last week, law firm Hall & Wilcox examines the areas which have dropped down the list in priority for the regulator.
