The biggest reason the banking royal commission exists is because of the litany of financial planning scandals which have cost many thousands of people their life savings.
Don’t risk your superannuation and financial future
To the industry’s enormous discredit, Royal Commissioner Ken Hayne, has a lot of material to work with.
Despite nearly 10 years of reform, Mr Ripoll believes it’s not there yet.
“Financial planning doesn’t have professional standards, a code of conduct, defined educational standards and the commitment to a fiduciary type duty to customers that real professions have,” lamented the former Labor MP – Mr Ripoll.
“When it comes to financial services, people don’t trust the system or the sector, or for that matter, really, government to be able to protect them fully and properly.”
Problems highlighted by a recent ASIC survey which found 79 per cent of financial advice still breached the Corporations Act.
“A large number of financial advisers are still tied within the major institutions and maybe the question is, are the systems they are working in supporting them giving advice that is in their clients’ best interests?”
An issue at the heart of the industry’s problems is education, or the lack of it.
“The base levels for the current education is a lot lower than virtually any other industry that’s out there, for example hairdressing,” said Associate Professor, Adrian Raftery, from the Deakin Business School.
“You can be a car salesman one week and effectively do a 34-hour course and be a financial adviser the next week.”
The terms “financial planner” and “financial adviser” have been enshrined in legislation.
“Clients are also far more savvy than they were 10 years ago and they are putting a lot of pressure on the industry to improve, and that’s a great thing,”
With the proliferation of general information sites like Finder and iSelect which are still often hit and miss we see specialist companies like Hashching for Mortgages and Find Financial Planners for Financial Planning services becoming more and more desirable.
The Royal Commission has highlighted how unprofessional and unethical the industry has been operating so its refreshing to see that the independent evaluation and recommendation sites like Find Financial Planners only recommends non bank Financial Planners that they heavily vet and qualify.