The financial planning industry could scarcely do a better job of confusing consumers if it tried. Experience suggests that it’s not well enough co-ordinated to do it deliberately; so surely the sudden emergence of multiple, competing adviser registers falls into the cock-up rather than conspiracy basket.
Nothing comes along for ages and then suddenly three separate groups are working on registers of financial planners.
Adviser View was launched on Monday; a second register, called Adviser Ratings, hit the street yesterday; and of course, the Australian Securities and Investments Commission (ASIC) may yet end up running a register, after a working party was convened by the government in accordance with amendments to the Future of Financial Advice rules.
So from having no real idea of which financial planners worked for which licensee, which financial planners are deemed good or bad, and which licensees have run foul of the regulator, we suddenly have the choice of three. And financial planners will potentially have their details available through three separate and inconsistent services.
It’s a tough decision – who do you want to be responsible for handling (and protecting) your details: a competitor (Adviser View has been developed by BT Financial Group); one run by a consumer advocate (Adviser Ratings is associated with former director of campaigns for CHOICE, Christopher Zinn); or one potentially one run by the corporate watchdog?
Adviser Ratings is actually also a competitor of sorts: it’s a corporate authorised representative of financial planning licensee iPraxis, a company established by its chief executive officer Peter Rheinberger. Among other things, iPraxis offers online financial advice.
The Adviser Ratings service is currently pretty light-on for actual adviser details. A quick look at 10 randomly-selected financial planners of Professional Planner’s acquaintance uncovered exactly zero information about their experience, background and qualifications. It’s early days, so let’s give it the benefit of the doubt for now.
Adviser Ratings will rely heavily on input from consumers to rate and assess financial planers. But given that ASIC’s shadow shopping exercises consistently find that most consumers can’t tell the difference between good and bad advice, at least some of these ratings will have to be treated with caution.
BT’s adviser register also permits consumer feedback and ratings, but it is at least already populated with useful information – albeit on a limited group of financial planners (Westpac’s bank channels), with Securitor and Licensee Select adviser able to opt into the service at their discretion in coming weeks.
A quick look reveals planners’ qualifications, the services they are qualified to provide, and their professional associations. Crucially, all of this information is independently verified, says BT’s general manager of advice, Mark Spiers.
Spiers told Professional Planner this week that if there were sufficient demand from financial planning groups outside the Westpac group it would “countenance” carrying details of their planners, provided all details also could be independently verified prior to publication. Spiers says “one source of truth” for consumers is critical.
So far, at least, BT’s register is the superior product. That’s not altogether surprising given the limited range of the advisers it covers, and the resources at the group’s disposal to develop this sort of thing. What’s perhaps more surprising is Spiers’ willingness to share it with the industry.
However, neither of these competing registers is perfect. Adviser View has good information but limited coverage; Adviser Ratings has wide coverage but sparse information. It could be that the government’s working party comes up with the the ideal compromise. After all, the government has impressive form on running professional registers.
