New education measures will not be enough restore trust in financial planners, an industry veteran believes.
The planner and consumer measures, which have been heralded as the key to restoring faith in the planning profession by a series of large institutions and industry organisations, won't be able to successfully weed out rogue operators responsible for bringing down the reputation of planners, according to Paramount Wealth Management principal Wayne Leggett.
"As much as education has a place, I don't think it solves the problem," he said.
Instead, Leggett called for harsher penalties for those who breach their obligations.
"It's more a case of setting up a compliance regime that is clear, relatively easy for all parties to follow but has severe penalties for stepping off the line."
However, he said a compliance regime that places a heavy burden on those who have always done the right thing is detrimental to consumer confidence as well.
"Someone might be feeling incredibly comfortable but as soon as you put all soon as you start putting all sorts of disclosures and disclaimers in front of them, they start to think ‘maybe I shouldn't be feeling so comfortable'. So it actually undermines the process it's designed to improve."
