The different segments of the financial services industry including financial planning, life insurance, banks, and product manufacturers must collaborate to eliminate unscrupulous financial advisers from the industry, ANZ Wealth has told Association of Financial Advisers (AFA) delegates.
Chief executive, Alexis George, told a life insurance panel discussion at the 2017 AFA National Adviser Conference at the Gold Coast last week that the industry currently suffered from a significant trust deficit, and while the different segments attempted to work autonomously, they must in fact work together to eliminate rogue financial advisers.
“I think our industry is like a big ball of rubber bands and we each try and differentiate ourselves and that’s great. We can all move a little bit, one rubber band goes from the ball a little bit,” George said.
“But ping, as soon as something is on the front page of any paper, we’re all back together in this big ball of rubber bands. And I think we really have to work together better. I honestly mean that.”
George also argued the issue of lapse rates as highlighted in the Australian Securities and Investments Commission (ASIC) 413 report on the review into retail life insurance advice were not a serious issue in the industry.
She said while the majority of advisers did right by their customers, a small per centage did not. She suggested all firms should sign up to mandatory reference checking requirements for advisers who moved around, and the checking should only be based on facts.
She said the duty of reference checking should not fall on the lap of the Australian Bankers’ Association.
“That has to be by some independent body because you’ve got to respect the rights of advisers and the privacy of advisers.”
AFA chief executive, Phil Kewin, said when the AFA licensees had refused to contribute to the ABA protocol on reference checking, arguing they had their own protocol that was across the board and did not align to any institution.
