Ex-CBA executive backs ASIC register over alternatives
Claims that the Australian Securities and Investments Commission's (ASIC's) national adviser register is a "band-aid solution" are being downplayed by a former Commonwealth Bank of Australia wealth executive.
SelfWealth managing director, Andrew Ward, said the national register was the best option available, and warned that existing adviser ratings tools were open to manipulation.
"A national register of financial planners is not going to work to protect consumers," he said.
"However, it's not a bad initiative and it's only a band-aid solution if there's a better option on offer, which there isn't here.
"There is already an independent ratings based registry called Adviser Ratings. It is a community driven website which allows customers to rate financial planners. The problem is that it looks like it can be gamed really easily.
"Financial planners who have good relationships get fantastic referrals from their clients and don't see the need for a registry or to use social media. Others, who don't get the referrals, tell their clients to go rate them on the site.
"So you get average financial advisers with really good ratings, and excellent financial advisers with poor ratings. It just doesn't work."
Ward said the financial advice model was "broken" and the next step in the development of the register should be to include how advisers are remunerated.
"The real problem with the industry is where the financial adviser is selling a product, not advice," he said.
"While this register will show if an adviser is linked to a financial institution, it will not show how they are being paid.
"For a financial adviser it comes down personal building of your brand and doing the right thing by your client.
"Those who get remunerated for giving advice, not for distributing products, are the ones most likely to steer through stormy waters more easily."
AUTHOR
Nicholas O'Donoghue
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