Letter – Stars lose their shine
I was interested to read the article on a new system where financial planners pay to be star rated in a reference database for consumers (“Advisers to pay for star ratings”, Money Management, July 7).
The concept of providing a star rating for financial planners appears to be a first and is so far unique to our industry. The question is, should the Financial Planning Association (FPA) as a professional body simply let this system commence without comment to members.
On the one hand the FPA provides brochures to the public which encourage them to look for professional accreditation, qualifications, work history and references. On the other hand, the public is being presented with a supposedly thorough rating system from a commercial enterprise.
If you examine the existing star ratings system for fund managers, you will find some immediate shortcomings. Some of the top performers for the past five years receive no stars and some of the poorest performers receive close to top rating. This is simply because some have paid for the rating and some have refused to pay as they believe the system has doubtful relevance.
Let's face it, the most important rating a professional can receive is the recommendation of long standing clients. The other things a client should look for are the accreditation of a professional body, academic qualifications, relevant experience and areas of specialisation.
Star ratings are questionable on the very basis that they must be paid for and they are not assessed by a recognised professional body. It's important for planners to realise this before they take on another needless layer of costs. It is also essential that their professional body, the FPA, remains the first point of reference for assessing financial planners.
<I>Chris Peters CFP Dip FP
Authorised Representative
Financial Wisdom
Queensland
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