Financial Standard Comments - Flaws in advice system revealed by ASIC report

Comment by John ()

John () — Wed, 28 Mar 2012 12:10:48 +1100

When will the FPA step up and start to actually lead. Where were the campaigns that noted the value of advice whilst ISN slammed advisers in their well televised campaigns?

The FPA has failed us, it chose to "lead" by what its constituent's wanted and that is why we are in such a mess - the Government dictating to us on how we deal with our members.

And the AFA is even worse!

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Comment by craig ()

craig () — Wed, 28 Mar 2012 14:23:25 +1100

If you ever had any doubts on media spin and the agenda of ASIC and the self appointed 50,000 Tweed suited Subaru driving teachers who pay to actually belong to CHOICE "Consumers association" here it is - the media report the bad news when the report actually states
" REP279 - ASIC Key findings ( on asic site.)
18. We found that, while the majority of advice examples we reviewed (58%) were adequate, 39% of the advice examples were poor, and two examples were good quality advice (3%)."
So media the media focus on the 39% - yet the factual news is 58% are adequate (ie.good ) and 3% exceptional. So, 61% of the shadow shopper had appropriate advice!
61%, So assuming you act on the advice from " Choice" and get more than one quote/plan odds are that two of your three choices will be " adequate" ( good in other words that don't suit their anti planner agenda) or excellent. Spin that.

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Comment by bob amery ()

bob amery () — Wed, 28 Mar 2012 15:44:07 +1100

Wow Craig that is phenomenal spin
you've just arbitrarily relabelled 'adequate' as 'good' and 'good quality' as exceptional
maybe those tweed wearing Subaru drivers ought to be wary of advisers like you!

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Comment by Steve ()

Steve () — Wed, 28 Mar 2012 16:42:17 +1100

Well I just typed the word 'adequate' into my thesaurus and it came up Adequate = sufficient, ample, enough, plenty. So I think Craig's argument is valid. After nearly 25 years advising clients and having seen the profession get bogged down in a bureaucratic morass it beggars belief that we are still talking about this. The regulator and FOS keep coming out and saying they want simpler advice documents and yet in these shadow shopping exercises they accuse advisers of not providing enough. If the bureaucrats think it's that simple why don't they come up with a model SoA. I defy them to come up with a 12 page SoA and pass muster in a shadow shop. The truth is most of the bureaucrats don't understand the advice process and have their own biases to deal with. Most of them are blinkered law graduates, with about as much contact with consumers as that mob in Canberra we jokingly refer to as our government. This needs to get sorted. As for the shadow shop I remember the first of these back in the early 90s. One of the panel who evaluated the 'plans' back then was an adviser who was also an official of the Australian Shareholders Society. At the time he told me that the majority of plans were OK and out of the 100 odd they marked then there were only 2 which one would regard as being really poor. The rest were all benchmarked against some ridiculous bureaucratic T crossing & I dotting model with the actual advice playing only a small part. Plans lost marks for not having an index or page numbering etc. So it would be interesting to see what criteria were used in the most recent one. You may recall in the last of these a few years back a dealer group achieved a poor rating because the clients supposedly didn't receive an FSG. Their rating was published in a consumer advocacy magazine. The clients subsequently did find the FSG amongst their papers and a legal battle ensued. The smell of beat-up is always in the air around these things.

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