The Australian Securities and Investments Commission (ASIC) has revealed that financial planners lost more than 200,000 clients last financial year.
The startling statistic is revealed in the regulator’s 2008/09 annual report in which it said “financial advisers lost approximately 215,000 clients, mainly due to poor performance of their investments and perceived lack of quality advice”.
The annual report went on to say that ASIC’s dual objective was to promote the acquisition of financial advice by consumers (that is, to increase access to advice) and to drive improvements in the quality of advice.
It said that, in turn, this would promote rational and informed financial choices by investors and consumers — which would contribute to improved confidence in the advice industry.
“To achieve this, ASIC is researching the quality of advice given to retail clients and the factors that affect this so it can find out how to improve advice,” the annual report said. “It also has a major project to consider ways of improving access to advice.”
ASIC noted that it had worked closely with the Financial Planning Association on their sample Statement of Advice. The document was created to help financial advisers understand how to give advice in a way that enables clients to understand it in a simplified format, while also ensuring that the advice is appropriate to the clients.
