Register of financial planners will not work
The Federal Government's plan to introduce a register of financial advisers with their qualifications and experience will not be enough to determine whether they are trustworthy financial planners or not, according to the founder of an online referral system for financial advisers.
Chief executive officer of ProAdviser Nikhil Sreedhar said the register will just list financial planners based on experience, qualifications, compliance and CPD points but this is not sufficient.
"The majority of financial planners are the pretty much the same — they are all experienced, are compliant, have the qualifications and CPD points, which can be earned by just ‘showing up' to a conference," he said.
"Consumers will still end up using that register to choose the planner that works for a recognised brand like the Commonwealth Bank or the National Australia Bank, and we're back to square one with the whole CBA scandal."
Sreedhar believes it would be more effective if the government made the register an application process whereby planners would have to apply, and pass all criteria before being accepted into the criteria.
He said an independent register would have more flexibility to weed out the bad apples and accept only those that are deemed as trustworthy.
Sreedhar also wants consumers to be educated on how planners get into industry, what qualifications they need and have, and how to spot good financial advice and financial planners.
"Consumers themselves should weed out the bad ones from the good ones and not just purely choose one based on the name," he said.
He added advisers should be certified financial planner-qualified, just like accountants have to be chartered accountants.
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