Senator says planners the problem in super
AUSTRALIAN Liberal Party Senator John Watson has criticised the financial planning industry, labelling it one of the significant weaknesses in Australia’s superannuation area and calling for the importance of financial planners to be reduced.
“Financial planning is the most difficult, challenging area of the super industry,” Watson said last week at the Australia’s SuperFuture conference held in Sydney.
According to Watson, a long-standing Federal Government commentator on financial services, an ideal situation would see people of a mature age not requiring financial planners, because they have the knowledge to enter into products on their own, therefore “lessening the importance or impact that financial planners have”.
Watson also flagged the need to reduce the impact of fees and charges in the financial planning industry and the need to upgrade the skills of financial planners.
“While this is changing, the members [of the financial planning industry] seem to be slow meeting the requirements,” Watson says.
Watson also highlighted what he perceives to be “the other problem” with financial planning — the issue of cost — arguing that fees and trail commissions are bad and lead to product pushing.
“Going to one financial adviser only is the worst thing you can do. Never lock yourself into one adviser or institution — always get a range of advice.”
Watson also questioned the worth of financial planners to lower net worth investors, stating that often the price paid for the advice was not worth the money invested.
“You have to make sure the cost doesn’t outweigh the benefits.”
He was also critical of the funds management side of the industry, saying too many funds at the moment are not responding or do so too slowly to investors’ needs.
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