From a practical point of view, if the simplification of a planner’s obligations to their client will make it easier for a client to highlight the deficiencies of a planner’s behaviour, and then having done that, they will have discharged their onus of proof, the planner will now have his obligation.

The weight then shifts to him to show why that happened, and to deny and support his side of the story. I just have a sense that simplification will make claims easier to make. They may be easier to rebut as well, but in a sense, though, it will make the onus of proof issue a little harder for planners.

When you talk to super fund trustees, you’re not talking about SMSF [self-managed super fund] trustees, because they’re the same person as the member. So you’re talking about larger funds. And members of larger funds, of course, see the trustee as being the large organisation up there, and are probably fairly daunted by the prospect of actually making any sort of a claim against such a body.

Whereas against your personal financial planner, you’re talking about a living, breathing being that you know all their faults and you’ve seen their pimples and all the rest of it.

Mackay: More importantly, there is a relationship there, and there is, I think, amongst consumers, an expectation that they have provided advice - not financial products, but advice - that is in your best interests. I think that it’s very clear that when someone has lost a considerable amount of money, and is feeling upset by it, that the face of that advice is their financial planner.

And if that financial planner is not taking into account their circumstances, not actively providing advice that is in their best interests, then I don’t see there’d be any problem with the consumer being able to challenge that. Consumers can’t distinguish amongst the would-be advisers.

And so many surveys have been done, where consumers go to a branded adviser from a product manufacturer, and believe that they’re not going to have undue representation of that particular financial [institution’s] product in their portfolio.

Townsend : Gwen Fletcher and I tried to get this through the ACCC [Australian Competition and Consumer Commission], as it is now - it was called the Trade Practices Commission in those days - in the early 90s.

Gwen recognised exactly what Claire said, and she tried to get the term “financial planner” codified under the Trade Practices Act, so you wouldn’t be able to use the term unless you had certain credentials and adopted a certain methodology. And the Trade Practices Commission, as it then was, just ran away from it.

Mackay: Whether you’re called a financial adviser or a financial planner, the fact is the ownership ties are so obfuscated, so that clients can’t make an informed decision.

Knox: It seems to me that what we’re saying is that when someone hides under a different brand within [a corporate group], which is currently what people do within the industry, the quality of advice can’t be good because it’s conflicted.

Mackay: No, it’s more. I have no doubt that there are great advisers in those large networks and in those large product manufacturers. It’s more the fact that consumers can’t make an informed choice.

Knox: Brand specialists and marketing specialists tell you that a single brand has an enduring depth behind it, so if you have Coca-Cola, everything connected with Coca-Cola will say something. And yet in the financial advising industry, for some reason, we masquerade under different titles, because we don’t want the name brand to come out. So it’s perverse.

Mackay: But why? The question is why has that happened?

Knox: Because underlying it is the fear that the name brand is a product manufacturer.

Mackay: But also the fear that we may look at their products that they’ve been put into, [and find] there’s a disproportionate weight towards that [manufacturer]?

Knox: Yes. The point I’m making is perhaps someone should be proud of that fact and stand up and say, isn’t it terrific that 80 per cent of the time we get used because our brand and our products are good. What I’m saying is that consumers have got no correlation on that.

And I read in a Ray Morgan survey recently...that 29 per cent of people, if I recall correctly, who went into an AMP-denominated brand, were unaware it was AMP, and had no idea at all that they’d be involved with the AMP. Now, if that doesn’t really demonstrate brand nightmare for the AMP marketing team, I don’t know what does.

But it does show that … there’s a lot of rhetoric around in terms of what people perceive on brands, and why they go into places.

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