Advice scandal prevention requires investor differentiation
The prevention of advice crises in a post-Murray financial system will hinge on differentiating between wholesale and retail investors, an investor registry head believes.
Sophisticated Access founder Peta Tilse said the failure to properly distinguish between the two investor types has been behind expensive advisory scandals, with the crux of the problems coming down to issues like disclosure.
"If the Government adopts the recommendations in the Murray Report, it is going to be even more critical for financial product providers and distributors to distinguish between the different investor types," Tilse says.
"Getting this wrong means the consumer may not be getting the right levels of disclosure, or access to financial products. These issues have been at the core of some of the recent advisory scandals, and very costly to all parties involved."
Tilse said the recommendations from the recent Financial System Inquiry advocate "fair treatment" of investors and believes this includes recognising their distinction and acting accordingly.
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
