Talk about the pot calling the kettle black. ASIC has trotted out its regular review of the 'quality of advice' survey by randomly selecting 64 pieces of advice from around Australia - and extrapolating the results to suggest that Advice is not very professional.
Out of the 64 advisers 'checked' (out of a pool of authorised representatives of 15,000), they are able to judge just 2 as 'good'.
My issue with this is that the judgment is based purely on the written document and does not provide any guidance as to the real advice offered. ASIC has yet to come up with a suitable methodology of evaluating financial advice and so we seem stuck with this flawed approach. We don't see ASIC broadcasting that 1/3 of their sample of written plans needed to be improved - we see a headline that 1/3 of financial advice is poor. Perhaps under the new limited advice regime, where no written plan is required for many of the guinea pigs sent out to evaluate, we will score far better!
Speaking of these 'clients'; will ASIC also publish the scope of the advice requested by each of these clients. Further, will it also identify the relative value of the clients and how much they were willing to pay for advice.
Notwithstanding this, I often get disappointed with the quality of written advice within our field - there are many who still operate in an industry rather than a profession. However, the fact of life is that we do live in a world where we are expected to provide professional advice irrespective of the ability of the clients to pay for it.
I hate to use this analogy, but if we were doctors offering a level of service for a fee that had to be paid for by the patients (as in private practice), if you couldn't pay, you would get a different service or no service at all. Does this mean doctors are conflicted?
ASIC is still not able to tell the public what constitutes good advice or how to find it - surely this is a failure on their behalf.
Further to this, we have seen reports in the press about the shadow shopping exercise today (25/01/12) yet the report is not available on the ASIC website - and as such is not open to any scrutiny.
Anyway...what do you think?
Out of the 64 advisers 'checked' (out of a pool of authorised representatives of 15,000), they are able to judge just 2 as 'good'.
My issue with this is that the judgment is based purely on the written document and does not provide any guidance as to the real advice offered. ASIC has yet to come up with a suitable methodology of evaluating financial advice and so we seem stuck with this flawed approach. We don't see ASIC broadcasting that 1/3 of their sample of written plans needed to be improved - we see a headline that 1/3 of financial advice is poor. Perhaps under the new limited advice regime, where no written plan is required for many of the guinea pigs sent out to evaluate, we will score far better!
Speaking of these 'clients'; will ASIC also publish the scope of the advice requested by each of these clients. Further, will it also identify the relative value of the clients and how much they were willing to pay for advice.
Notwithstanding this, I often get disappointed with the quality of written advice within our field - there are many who still operate in an industry rather than a profession. However, the fact of life is that we do live in a world where we are expected to provide professional advice irrespective of the ability of the clients to pay for it.
I hate to use this analogy, but if we were doctors offering a level of service for a fee that had to be paid for by the patients (as in private practice), if you couldn't pay, you would get a different service or no service at all. Does this mean doctors are conflicted?
ASIC is still not able to tell the public what constitutes good advice or how to find it - surely this is a failure on their behalf.
Further to this, we have seen reports in the press about the shadow shopping exercise today (25/01/12) yet the report is not available on the ASIC website - and as such is not open to any scrutiny.
Anyway...what do you think?
good piece Paul
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