Outsourcing technical requirements compromising accuracy of advice: Bruining
|
|
The growing trend of outsourcing technical requirements and paraplanning to external companies may be compromising the accuracy of financial advice, according to a submission by former Financial Planning Association director Nick Bruining.
The quality of the data collection will determine the accuracy of advice given, he said.
“What becomes relevant information to be used in developing [a] plan is partially dictated by the data collection process, but prioritisation will be influenced by the data collector’s own level of expertise,” the submission stated.
Bruining fingered planning firms that are too focused on funds under management (FUM) for causing the problem, claiming they outsourced their technical knowledge so their advisers generating FUM inflows weren’t caught out by technical problems.
Bruining also said the education level of financial planners was too low, and a tertiary qualification in commerce or a similar degree should be a minimum standard for providing financial advice.
“It is unlikely that a person completing a two or three week full-time course would have the depth of knowledge … to provide even basic useful advice on the products they distribute,” Bruining said.
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
