Tarnished by the same brush
Much has been written and said in the lead up to the release of ASIC’s eagerly anticipated shadow shopping report on super switching.
Thankfully, the financial planning industry has come a long way since the infamous ASIC/ACA Quality of Advice report released three years ago, where half of the 124 plans reviewed were considered borderline or worse.
Since the release of that report, organisations like the FPA have been proactive in raising standards and taken considerable steps in lifting the bar on professionalism. Initiatives like the recently adopted Principles for Managing Conflicts of Interest, as well as others like the Code of Practice on Alternative Remuneration, and the Industry Guide on Rebates and Related Payments, are to be congratulated. They will go a long way towards improving the transparency of payment and remuneration practices in financial planning, as well as enhancing client understanding of the cost of advice.
In fact, recent comments from the regulator have been supportive of these moves, saying they are a “step in the right direction” and “another example that reflects industry initiative in raising standards”.
So why then is the financial planning industry bracing itself for the worst when ASIC releases its super switching results?
Unfortunately, recent events, like the Westpoint collapse and commission debacle, have highlighted the ease with which planners can be targeted.
We all know there are still ‘bad apples’ operating in this industry, just like there are in every other profession and trade. Much is being done to weed out these individuals, but there is still a way to go.
The unavoidable fact is that we all work in a highly emotive industry. When you put people’s financial wellbeing together with bad advice and, inevitably, result in lost savings, the government, media and consumer advocacy groups will come gunning for blood. And regrettably, it only takes a couple of ‘bad apples’ to tarnish the reputation of all.
It will be interesting to watch how the various planning associations respond to any negativity — or positiveness — that emerges from the super switching report. Let’s hope it’s a co-ordinated, proactive response that clearly articulates the strict path of professionalism financial planners are travelling along, and not the poorly orchestrated defensive response that embarrassed many planners three years ago.
And for the sake of all planners and their clients, let’s also hope ASIC gets its findings right, with no amendments or corrections to its results, which put a cloud over the integrity of its findings three years ago.
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