MELBOURNE - Greg Medcraft, chairman of the Australian Securities and Investments Commission (ASIC) recently spoke about the appalling state of the financial planning industry in our country. ASIC has acknowledged the need to lift standards for financial advice and proposed ideas to combat these issues.With more consumers left financially devastated by poor financial advice, it is becoming increasingly evident that there should be trust and confidence restored in financial services industry. Consumers should think about their financial adviser’s qualifications, experience and reputation and then decide on who they can establish a trustworthy relationship with so there can be confidence that they will receive quality advice.
ASIC to Raise the Bar
There is a trend in the financial advice industry where advisers focus on their own interests in generating commissions, rather than on the client's best interests when it comes to providing investment advice. In the past, financial advisers were merely encouraged by ASIC to become more customer focused, which has not been very effective in creating change.
One of the main issues that contribute to the poor state of affairs in the industry is the minimum qualification standards for financial planners and advisers. Currently to become a financial adviser you must complete a Tier 1 RG146 training course in areas which you will be providing advice. These training courses that are listed on the ASIC training register can widely range in competency requirements. Therefore ASIC are proposing to develop a national exam to qualify financial advisers and to build a register of financial advisers to establish comprehensive standards.
Another issue is the significant incentives that financial advisers receive for pushing high-risk financial products onto their clients even though they may not be suitable for the client’s financial circumstances or risk profile. Meanwhile, clients are unaware of products in their portfolios, as they are relying on their advisers to provide on sound advice on their investments. Hence implementation of recent Future of Financial Advice (FOFA) legislation to enforce best interest duties and ban conflicted remuneration.
HLK Group Pty Ltd supports ASIC's quest for facilitating a generation of responsible financial advisers by only authorising representatives that are trained, qualified and experienced. We also encourage the public to always look for advisers who are AFSL holders, or who are authorised representatives of AFSLs.
HLK Group
Suite 104
282-290 Oxford St
Bondi Junction NSW 2022
Phone: +1300 669 605
E-mail: info@hlkgroup.com.au
Website: www.hlkgroup.com.au