Login
iscover
Moves to improve standards within the financial advice industry are effectively shutting average Australian households out of advice because the measures are pushing up adviser costs.
Rising red tape limiting financial advice
21 October 2014
•
6 minute read
Chris Kennedy, Wealth Advisory director at William Buck, said an ongoing appetite for regulation is working against those it is designed to protect.
Mr Kennedy warned that a fixation on legislating to improve adviser competence is pushing advice out of reach of the average person.
“One of the things that FoFA was designed to do was make sure the ‘little guy’ would have access to advice, but what it has actually done to a degree is cut them out because the burden of the legislation has pushed up adviser costs,” he said.
According to Mr Kennedy, the appetite for regulation of the industry was being driven by the actions of a few bad advisers, with good advisers and consumers paying the price.
“Within big institutions where there is a vertically integrated model there are conflicts, but that doesn’t reflect the industry as a whole,” he said.
“For every bad story there’s 100 good ones and we don’t need another layer of legislation to tell us how to look after our clients."
Mr Kennedy highlighted education, which was flagged in David Murray’s interim report as a key issue for the industry, calling for higher minimum standards for those offering financial advice.
“Education is important because it gives the public confidence,” he said.
“At the current time, people are qualified to give advice once they have a RG146 qualification. That basically means once they complete four subjects in financial planning they are qualified to give advice.
“There needs to be a higher minimum of level of education required as an industry standard. That’s where the focus should be if you want to lift the quality of advice,” Mr Kennedy said.
You need to be a member to post comments. Become a member for free today!
- <p>George, after reading your website and the following quote from there that your affiliates would be offended by your broad brush comments.</p><p>"we have strong affiliations with a number of firms qualified and licenced to give advice in this area"</p><p>It would be like me saying that because your accountant has been in business since 1975 that he is out of date as he can't spell the word licensed on his website.</p><p>I am sure in all your years of experience that you have never made a mistake that cost the client or that you have not come across another accountant who has made a mistake or bad choice in preparing returns.</p>0
- <p>And why is there red tape? Because all the shonky advice in the past has caused the regulators to increase the regulatory requirements. The industry only has itself to blame. It is the poor public (the consumers) who lost heaps in the first place and are no having to pay higher costs for the mistakes of those who caused them to lose the money!!!</p>0
