The Boutique Financial Planners Group (BFP) acknowledges that this latest ASIC report is further indication that consumers in Australia are still not getting the advice that they deserve. The motivation and conduct of unscrupulous advisers is consistent in rewarding themselves at the expense of the client. This behaviour would not change if upfront commissions were banned. It is the poorly resolved conflict that must be addressed rather than simply the remuneration structure in isolation
BFP members recommending insurance products allow client circumstances and professional judgement to dictate the remuneration basis selected. BFP members are also FPA members and uphold the FPA Professional Code of Conduct. The FPA Code represents the best assurance a consumer can get that their adviser’s conduct and motivation is aligned with the consumer’s best interest.
It is not clear from the ASIC study how many advisers in the sample were subject to the FPA Code of Practice, but we do know that only about half of the adviser population is subject to the code. That 50% represent less than 5% of the cases of poor quality advice prosecuted by ASIC.
While the BFP is unaware of any members being the subject of adverse findings we can say that all of our members are AFS licensees focused on holistic financial planning which often includes “strategic life insurance advice ” as recommended by ASIC in its report.
The BFP agrees with comments by the FPA in relation to the report regarding the need to raise financial adviser education standards and that many of the issues identified by the report related to product design and pricing flaws that can and should be addressed by the product issuers.
