There is an unfair bias in the reform agenda against advisers, and more attention should be paid to researchers and product providers, according to the Financial Planning Association (FPA) and Fiducian’s managing director Indy Singh.
FPA deputy chief executive Deen Sanders said the standpoint was a core plank of the FPA’s Future of Financial Advice Taskforce.
“We’ve certainly rallied against that and tried to get the Government to understand that advice is an intrinsic part of the client relationship. But there is a whole lot of obligation further up the chain that I think has been underplayed and underappreciated by the Government,” Sanders said.
He asserted that in many cases of inappropriate advice, advisers were acting upon information provided to them about a product.
“Our rules and the law are quite clear that an adviser has an obligation to truly understand the product they’re advising on, and it is irrelevant what a [business development manager] or a sales person may have told them,” Sanders said.
“However, we are very aware of the fact that there is a lot of misinformation out there and frankly ASIC’s [the Australian Securities and Investment Commission’s] own work on product disclosure has revealed that in the majority of cases, Product Disclosure Statements are left wanting.”
Fiducian’s Singh said most advisers wanted to do the right thing by their clients.
“Sometimes they try to overdo things for [their clients], and invariably they get the blame because the products either promised too much or they were designed incorrectly, and the designers gave the impression to the [advisers] and the researchers that they would deliver more than they actually could,” he said.
“The information that advisers have can only be so much. If an adviser has to do all the research and study the products from go to whoa, and then go and market and meet their clients and give advice and study their CFPs and read Money Management and do everything else, they need about 52 hours in the day.”
Singh asserted that more attention should be paid to the role played by researchers and product providers when things go wrong.
Sanders said financial planners had the right to rely in good faith on their licensees, researchers, product manufacturers, auditors and ASIC doing their jobs properly.
“Frankly, we think it is completely inappropriate that financial planners are always the ones who are left holding the can for failures in any one of those systems,” Sanders said.
