Extra planner education urged on leverage

Dealer groups have an obligation to ensure that only those planners who are suitably qualified are allowed to deliver advice around leverage and margin lending, a Money Management roundtable sponsored by Bendigo and Adelaide Bank's Leveraged business has been told.

Discussing where margin lending and the use of leverage sits within current advice offerings, Shaw and Partners head of Wealth Management, Earl Evans said he believed there needed to be far more stringent and better education where leverage and margin lending is concerned.

"I'm flabbergasted that six to seven years past the global financial crisis (GFC), we are still putting things in place," he said.

"We are doing better but we need to do far better."

VIEW ALL

View all

Evans noted what had happened with respect to the collapse of Storm Financial, and said a few bad players had pulled the industry down and made it a whipping post for politicians.

"This is disturbing for the honest practitioners who come to work seeking to do the best for their clients," he said.

Epacris Securities planner, Kevin Flynn, emphasised the need for education around leverage and margin lending and said there were very good reasons why dealership groups were quite conservative and probably over-conservative.

"A little bit of knowledge in the wrong hands can lead to a lot of trouble. Dealer groups are conservative for a reason," he said.

"There needs to be more education and more education focused on full-scale gearing."

Flynn said there was a need for education in circumstances where a lot of advisers had seen it [margin lending], heard about it but had decided not to get involved in it.

"They are concerned about litigation," he said.