Register of financial planners will not work


The Federal Government's plan to introduce a register of financial advisers with their qualifications and experience will not be enough to determine whether they are trustworthy financial planners or not, according to the founder of an online referral system for financial advisers.
Chief executive officer of ProAdviser Nikhil Sreedhar said the register will just list financial planners based on experience, qualifications, compliance and CPD points but this is not sufficient.
"The majority of financial planners are the pretty much the same — they are all experienced, are compliant, have the qualifications and CPD points, which can be earned by just ‘showing up' to a conference," he said.
"Consumers will still end up using that register to choose the planner that works for a recognised brand like the Commonwealth Bank or the National Australia Bank, and we're back to square one with the whole CBA scandal."
Sreedhar believes it would be more effective if the government made the register an application process whereby planners would have to apply, and pass all criteria before being accepted into the criteria.
He said an independent register would have more flexibility to weed out the bad apples and accept only those that are deemed as trustworthy.
Sreedhar also wants consumers to be educated on how planners get into industry, what qualifications they need and have, and how to spot good financial advice and financial planners.
"Consumers themselves should weed out the bad ones from the good ones and not just purely choose one based on the name," he said.
He added advisers should be certified financial planner-qualified, just like accountants have to be chartered accountants.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.