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Are some advice remediation programs flawed?

The robustness of the advice remediation programs conducted by the major banks has been questioned by an academic who has suggested some of the work has been carried out by contractors unqualified to deal with complex problems.

Adjunct professor in finance, Shantha Yahanpath has foreshadowed problems in the future from remediation programs which he claimed had been outsourced to consultancy firms which, in turn, had “sourced ‘contractors’ from recruitment companies and armed these contractors with ‘hot-housed’ financial planning diplomas”.

“Having taught financial planning programs at tertiary level, I can safely say that a financial planning diploma ‘hot housed’ within weeks is of little value even to handle simple financial planning problems let alone complex remediation problems,” Yahanpath said.

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“The question is how robust these remediation programs handled by the ‘hot housed’ contractors are?” he said. “Most of the contractors use these programs as a short-term stepping-stone opportunity and some leave due to burn-out. Haven't they learnt anything from the problems created in the first place by taking short-cuts and keeping the regulators in the dark?”

Yahanpath claimed what was occurring in some remediation program was at odds with good enterprise risk management.




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very sanctimonious. Very typically of someone working at Uni. So she taught a FP class..wow! Most advice they review is written by Advisers (and paraplanners) who have FP Diplomas. What are her critical thoughts on that chestnut? too hard, I guess.
All of Count Financial Advisers only have a two week diploma.. In the end, very few of the remediation people get hired without paraplanning or years of FS experience..and it will all be have overseen by managers. I was interested in what an adjunct professor was: according to google: "a professor who teaches on a limited-term contract, often for one semester at a time, and who is ineligible for tenure"

Thank you for your comment. But the quality of the reply and grammar itself beg the question of standards in the industry.

In that case your reply shows your outright bias. How can you teach FP when you have never sat in front of clients, and do not have the qualifications to be one?

I have been in financial services and been an authorised representative of one of the largest dealer groups. That is besides the point. Discuss the facts please.

Read this comment from a person who had gone through the process of hot-housed remediation.

"Having worked in one of these remedation programs run by a global consultancy firm i have to say that its a rort!
The bank (the client) is constantly altering the guidelines that the consultancy company has ro follow, depending on how much compensation they have to pay out.
The consultancy company (a Big 4 consultancy) is more interested in pushing out cases as quickly as possible. They hire experienced practitioners early on for their knowledge and then replace them with university graduates to pump the cases out asap.
Rumour has it that the bank pays the consultancy about $5k per completed case. The target started at 2 cases per week per case manager and then ramped up to 5 cases per week. The global consultancy is clearly driven by $$$$ at the expense of quality. On another note..why the Big 4 accounting firms have escaped the scrutiny of the Royal Commission is a huge mystery. There is a lots of dirt to be uncovered with those firms!"

Happy for you to spell check, because a professor you are. I have a few questions Professor.
What aspects of my response are you questioning the quality of professor?
What questions are you begging of the industry’s quality?
Do you have data to support your assertion regarding the education qualifications of remediation staff?
Do you have data that confirms the length of study to complete the DFP for remediation staff?
Does your FP consulting business raise any conflicts to your assertions here?
Feel free to also grammar check Professor. I only have a FP diploma.

Unfortunately you have failed to identify yourself. That itself is an issue for me. The response below from one of the readers who had worked within this "hot-housed" remediation programs should give some insight for you.

"Having worked in one of these remedation programs run by a global consultancy firm i have to say that its a rort!
The bank (the client) is constantly altering the guidelines that the consultancy company has ro follow, depending on how much compensation they have to pay out.
The consultancy company (a Big 4 consultancy) is more interested in pushing out cases as quickly as possible. They hire experienced practitioners early on for their knowledge and then replace them with university graduates to pump the cases out asap.
Rumour has it that the bank pays the consultancy about $5k per completed case. The target started at 2 cases per week per case manager and then ramped up to 5 cases per week. The global consultancy is clearly driven by $$$$ at the expense of quality. On another note..why the Big 4 accounting firms have escaped the scrutiny of the Royal Commission is a huge mystery. There is a lots of dirt to be uncovered with those firms!"

All the best! Continue your studies!

Hi Professor, there is no need to be defensive, or dismissive, I would just like some data to back up your claims, and also for you to clear up your assertions are not conflicted in that you own a consultancy for FP businesses. I am merely questioning your assertions formally submitted publicly. The fact you believe you need ever readers identify to back your claims and clear up a perceived conflict is worrying. Why comment in the first place? You only wish to comment positively to those that agree with you and dismiss those that don’t? I think the fact you rely on the comment of a reader to back your claims is the most worrying. Certainly, Seek data would have been available. Look forward to your response. Sorry for long response, I get excited sometimes. Lastly, the media has reported on rushed nature of remediation programs by CBA. I will never back CBA but they did need to hire 500 remediation staff at one time, and 90% of their Count ARs were put through the 1wk diploma (though they have B.Acc). Any people trust accountants!
Btw, I never said I was studying...

At least continue to do some CPD's.

When does your "book" go on sale after this virtual book tour of yours?

Book on risk management is not even contemplated at this stage. However, there is a request for a chapter of a book from US.

For example, one group of young graduates have received a Diploma (4 subjects) within 3 weeks. Having completed a diploma and taught these subjects at postgraduate level, I cannot understand how some organisations "compress" diplomas without compromising the quality.

“An imperfect creative expression is much more sensible and creative than a grammatically perfect expression without an iota of sense and value in it.”

Noted.

Having worked in one of these remedation programs run by a global consultancy firm i have to say that its a rort!
The bank (the client) is constantly altering the guidelines that the consultancy company has ro follow, depending on how much compensation they have to pay out.
The consultancy company (a Big 4 consultancy) is more interested in pushing out cases as quickly as possible. They hire experienced practitioners early on for their knowledge and then replace them with university graduates to pump the cases out asap.
Rumour has it that the bank pays the consultancy about $5k per completed case. The target started at 2 cases per week per case manager and then ramped up to 5 cases per week. The global consultancy is clearly driven by $$$$ at the expense of quality. On another note..why the Big 4 accounting firms have escaped the scrutiny of the Royal Commission is a huge mystery. There is a lots of dirt to be uncovered with those firms!

Thank you for your comments Brett. It looks like you have gone through the process. These short-cuts may create further problems down the line as the good old saying goes Penny wise and Pound foolish.

Interesting cost per review. thanKs Brett. Assuming ASIC follow the same fee schedule for reviewing client advice files, that would be around $5000 per review. I assume the review would have all the research provided, and the fact find provided, and nil time for client meetings and education it would appear that I should be charging more than $5000 for an SOA..... No wonder they can find 90% of SOA's are not detailed enough or fail some area. (I am sure there are bad SOA's, but my point is more about how much time should we be spending and charging for)

I think it is more to do with doing the right thing. If you give 2-week hot-housed diploma holders complex cases then you are inviting problems.

Dear Shantha, my comments are not about the diploma or the process. They are about the cost of giving advice. (ie If it costs $5000 to review the advice when it is all in front of you; then what is the real cost of giving the advice..... ) I'm sorry I was not clear enough about that.

Dear Robin,
These are not normal reviews. Remediation involves much more than a simple review. In other words trying to understand what financial planners have done, finding solutions to"poor advice", interviewing clients, understanding rationale for investment strategy, evaluating clients' expectations, fee structure etc....the list goes on. Some cases go for weeks. Hence high fees. Total costs of these programs run into millions of dollars.This is the very reason young graduates with 2-week diplomas may not be the best for the task. Once they have done with remediation these 2-week diploma holders may even secure financial planning jobs. The disturbing reality is a big consulting firm appears to be involved in this for the short-term gain.

https://www.researchgate.net/publication/305572820_Is_Banking_on_Wealth_...

Reads like a rip off to me. Looking over a fact find and SOA to connect the advice dots is not rocket science. I cannot believe you can justify such high fees for what is really a simple process that anyone with a checklist could perform.

That is true to some extent if experienced people handle these tasks. Remember, the outsourced consultancies will have to add their "modest fees".

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