Financial Planning Industry- Regulation and Reputation
The Australian financial services industry, despite the ongoing examination and recent negative media is one of the world’s leaders
The regulatory framework we have does apply tough standards
on Financial Planners, however I can understand standing
in your shoes that you would question this given the collapses
and
failures that have been in the media. The unfortunate issue
we have is that the whole Financial Planning industry gets
dragged down by what every industry would have, that is
some “bad
apples”. Current regulation and the industry itself
have failed to indentify these “bad apples” and
it’s taken a global financial crisis (GFC) to shut
down these operators. The GFC has dampened consumer confidence
and the fall out has negatively impacted on the financial
planning industry. In this article,
I’d like to give you an insight into the views of
Count and how we are positioned.
We can only begin to improve the industry’s reputation if we focus on three key areas.
1. Improve industry practices
This begins with our current licensing regime; (issuing
operators a licence to give advice, or promote a product)
this responsibility lies with the Australian Securities & Investment
Commission
(ASIC). The barriers to entry need to be lifted, currently
it is too easy to get a licence, until this area is tightened
the problems we have seen can never really be resolved.
Once a licence is issued, ongoing supervision and monitoring
is required. Count has an industry reputation for being
very effective in our compliance, and has always imposed
more stringent policies then what is required by legislation
on your Count Adviser. This is because we are committed
to ensuring when you choose a Count Adviser, the advice
you receive comes from a professional delivering real value,
efficiency and a broad range of
services that suit your needs. Count has an independent
research process, this means the solutions a Count Adviser
can select for you must be approved. Our tough and conservative
approach has resulted in products like Westpoint, Opes
Prime and Basis Capital having never made it to the list.
We have been one of the very few groups to have this track
record. Further, we have conservative polices that have
maximum levels for gearing (borrowing) or alternative asset
classes that are more “risky”. Count clients
have not been immune from negative market performance – but
that is all they have been subject to – not losing
their money on bad quality investments. Currently the industry
is talking about moving to “back to basics” strategies
for clients – these strategies have been Count’s
investment view for over 20 years.
2. Enhance financial literacy standards
The role of the Adviser is to explain the strategy and
discuss with you the risks associated so you can make more
informed decisions about any recommendations. Legislation
to protect the client enforces documents such as a Financial
Services
Guide and Statement of Advice are provided. These documents
outline your strategy and fees that you will be charged.
These documents do need to improve as they are very long
and cumbersome; Count is working to ensure these documents
move to be more clear, concise and easy to understand.
Financial services is complex, Count enforce ongoing training
requirements on our Advisers. Education is a long term
investment, but the industry does need to enhance financial
literacy to improve the understanding. I always tell people
the basic life skill that applies to all areas and especially
Financial Planning, if you see/or are told something that
is too good to be true then chances are, it usually is.
Wealth Creation is a long term process that requires discipline.
Count Advisers are not interested in making you an overnight
success; they are interested in helping service your needs
over the long term. A big part of this is ongoing and proactive
communication though all periods of the market cycle.
3.
Demonstrate the value of Financial Planning advice
Financial Planning is more than just placing investments; it’s about an experienced and well qualified individual understanding your needs and goals and providing you with solutions to help you achieve them. This process also needs to take into account your changing needs and lifecycle. The industry does need to better demonstrate the value of advice to Australians, current debates on this issue always focus on investment performance and fees and do not address the two real issues facing Australia.
The first real issue is inadequate savings (i.e. as a nation we like to spend more than we save) and secondly we are underinsured. (i.e. we like to insure material possessions but not our income or life). Your Count Adviser will address these with you as they are important to help you achieve your goals, help you create wealth, give you the ability to make independent choices and importantly protect your wealth in the adverse event that something happens to you and you lose the ability to earn an income.
You may read a lot about debates on commissions. Your Count Adviser has the ability to offer you a fee for service agreement. Under the Count service offering, the way you pay for your advice is your choice. This could include commissions, a fee for service or a combination of both. Either way you can rest assured that Count sets a maximum fee that represents the value of your advice. It is our view that the payment method is irrelevant, what is important however is to ensure the payment process is transparent and that you are fully informed.
Australians need advice and the one stop Financial Planning
service Count offers means your Count Adviser can assist
you throughout your life stages. We embrace industry developments
that drive the cost of investment down for clients and
we support and stay ahead of government and industry initiatives
aimed at simplifying the advice process. There is a lot
of positive change that will come and you should rest assured
that your Count Adviser is the best person to service your
needs. Each Count
Adviser is backed by a head office who is working with
regulators and industry bodies to ensure management of
any change is in the right hands, so industry participants
don’t repeat mistakes and the Financial Planning
industry reputation as a whole is improved. Thank you for
your trust in Count and your Count Adviser we never lose
sight of ensuring any decision we make is always made with
your best interests
in mind.
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As at 10 June, 2009 |
