It ought come as no surprise to most Australian financial planners that they have an image problem and that they represent an easy target for what was once known as the ‘popular press’.
The depth of that image problem and the appetites of the popular press were made clear in the last week of June when, just hours after the Australian Broadcasting Corporation’s 7.30 Report went to air with a none-too-deep and none-too-flattering analysis of the fees versus commissions debate, The Sydney Morning Herald published a story about a supposed Australian Securities and Investments Commission (ASIC) raid on financial planners.
For the record, it appears that the so-called ASIC raids were not raids in the door-busting context usually associated with the word. Nor, it transpires, were those being raided necessarily financial planners. Rather, it seems the targets of ASIC’s attentions might have better been described as accountants — not that this was ever acknowledged. Nor, for that matter, was the publisher’s holding in a discount brokerage for managed funds.
In a similar vein, nowhere in the 7.30 Report’s story about retail master trusts, industry funds and fees versus commissions did the program think to ask questions touching upon the member expense ratios within industry funds.
But in the wake of Storm Financial and Westpoint, can the public be expected to care about such distinctions?
One of the problems confronting the financial planning industry is that it entails structures and concepts that are neither easily understood nor readily translated by the media. Those two factors then need to be viewed alongside the simplicity of the concepts being offered by the critics.
Whether or not a raid took place and whether or not that raid involved accountants rather than financial planners becomes irrelevant. Such negative reports serve to further undermine public perceptions.
The challenge for those organisations charged with representing the financial planning industry is to restore its reputation. A major step in achieving that objective is clearly the education of the media on the key issues.
– Mike Taylor
