The Financial Service Reform Act (FSRA) will not change community perceptions of financial planners nor will it stop people from being dishonest according to International CFP Council chair Ray Griffin.
Speaking at the Resnik Wealth Management Conference yesterday, Griffin, a Tamworth based financial planner, says there is no way the Government can create laws to make people honest and the industry needs to come to terms with poor behaviour by changing its culture.
“We can’t legislate for honesty, people are either honest or they are not honest and I would suggest we have some people in the industry that are dishonest.”
“Regardless of the laws people will always break them and tarnish the reputation of the industry. However if we put our clients first, ahead of self interest, all else will fall into place,” Griffin says.
Griffin says consumers deal with financial planners, and not the dealer groups or back office staff, so planners must step up and take responsibility for providing a valuable and reputable planning process.
The role of dealer groups would then be to provide service for planners to do so Griffin says as there is growing pressure on planners to show where is the value in the advisory process.
Griffin says even the adoption of professional standards by the industry would not change perceptions and says a move to a professional service driven model was the solution.
“A shift in the culture of planning is what will correct the public image of planning. We have to be a professional movement. We have believed our own marketing for too long that we were getting better and the recent events have shown the public see us differently,” Griffin says.
“This is not a physical change and we need to be challenged on it regularly to ensure change will happen. There will always be crooks in all professions but I for one am sick of having my reputation tarnished by those in our industry.”
Despite FSRA not have an impact on the public face of financial planning Griffin says it will improve the business practices of advisers who are now being forced into having businesses that comply with the law.
“FSRA will ensure good business practices are put in place but if a planner can’t pass the FSRA requirements then they should give financial planning away.”
He also says it should lay the ground rules for cleaning up other financial services schemes and promoters, such as property schemes and seminars, which at present remain unregulated.
