Appearing at the 2021 Adviser Innovation Summit on Tuesday (9 November), Audere founder Stewart Bell was asked during a Q&A if he believes ASIC should wear some responsibility in the fact that only 15 per cent of Australians seek financial advice.
Mr Bell responded by saying a combination of legislation and bad advice has hindered the sector but said that what is coming is “way more positive” than what has come in the past.
“In truth, we went through a period where some of the issues, though magnified, were to do with the way advice wasn’t being provided right,” Mr Bell said.
“You could argue whether the legislation that’s been put through has necessarily changed things. I personally think there’s a lot of stuff in there which doesn’t necessarily fulfill a purpose.
“But for me, it’s just not about who’s responsible and it’s not about the imperfections of the past. I truly believe that right here and now, we stand on a bit of a cusp. The media, the perception of advice has changed, the demand is continuing to grow, technology’s starting to come about, we’re going to start to see some of the repeal of the bureaucracy.”
Mr Bell’s comments come as ASIC gears up for its new responsibilities of the recently passed Better Advice Bill that will see the financial services and credit panel within ASIC become the single disciplinary body for advisers from 1 January 2022.
The legislation will also see the removal of the Tax Practitioners Board (TPB) as an advice regulator and that FASEA be wound up, with its responsibilities to be given to Treasury and ASIC.
If everything is so well with the financial advice industry, why is everyone else to blame, why is the public trust in financial advisers at the level of used car dealers, and why are people steering clear of financial advisers. The industry needs to do something to improve public perception.
A distant understanding perhaps because I am now retired and in my eighties. But I know well the early history of financial planing, being one for many years. I and many of my colleagues eventually left the industry because we could not in good faith charge commissions on advice that produced the best fees, and was not in the clients best interests.
The banks erred when the got on the lucrative band wagon of financial planning by buying out those sections of the insurance companies, together with their toxic culture. I am pleased to see the banks divesting of these services now.
The financial advice industry is still suffering from a very poor public perception because of the past culture and I am ashamed to say I was a part. Current advisers who do not know the past history and are still clinging to that past toxic culture will wonder why the public shun financial advisers.
How about working on trying to improve your public image, rather than blaming others and defending your battered past.
Sounds like a bit of a death bed guilt trip Robin to repent your sins.
There was many good Advisers doing the right thing by their clients long before BID & FARSEA.
Clearly you have a guilty conscience to try to rid yourself of.
There will always be some dodgy operators in all professions, industries etc but the real criminals that have never been fined or banned are the Big Bank managers and too dogs that pushed the vertical sales and didn’t give a crap about real clients.
Thankfully they are mostly gone.
Hope you are feeling relieved blaming Advisers, yet again always the advisers, what BS.
So why is the public image of financial advisers so bad that people are staying away in droves? It has nothing to do with me.
ASIC is not to blame for Australian’s reluctance to seek financial advice. It is entirely the fault of the financial advice industry and until the industry realises this, and stops blaming others, people will continue to stay away in droves.
It all started with the insurance industry moving into financial advising, and bringing their commission based charging system with them, where they were paid commissions based on the amount of insurance they sold. The object was to sell as much insurance as possible with scant regard for the client’s interest, and this culture was brought with them.
Financial advisers were little more than glorified sales people focussed on selling inappropriate investments that provided the best commissions to themselves, at the expense of their clients. Is it any wonder that people are reluctant to seek financial advice?
This culture still exists today, although it is gradually changing, in spite of the industry strongly resisting the removal of commission based fees. If the financial advisers had focussed on providing a service to the public, and improving their education, and not on feathering their own nests, then ASIC would not have had to step in with their regulations and perhaps they might have been less severe.
I am pleased to say that the industry is now moving in the right direction, and if the old culture is removed altogether, then perhaps the public will have the confidence to consult financial advisers again.
hear hear
Yeh sure Robin, had ASIC done anything to stop the banks / instos massive sales culture as you describe and massive Fees for No Service, of which ASIC knew about for 10 years and did nothing.
Disgusting big bank management of Advice as a product flogging distribution system.
Pathetic ASIC who did nothing to stop the banks and instos.
But yes of course it’s those naughty Advisers that have caused all the problems and must be regulated to death.
Great one eyed take on the situation, NOT.
But, ASIC aside, isn’t that Robin’s point?
People lost trust in the industry as a whole because they saw it as swamp full of shysters eager to line their own pockets at the expense of their clients. The poor reputation of “independent” advisors drove people to the banks and instos, who turned out to be even worse.
ASIC being asleep at the wheel for 10 years only fuelled the feeding frenzy, and now here we are. An overzealous regulator covering up for their past inactions and using a 15 tonne steamroller to crack a walnut.
The excessive costs resulting from ASIC’s pigheaded approach only turns people away once you’ve got them in the door. The industry’s poor reputation is what keeps them from knocking on that door in the first place.
I agree with Robin. Fix the industry from the inside and the rest will take care of itself.
Robin I would totally agree with you if my fact checking was based on sensationalist media reports.
If you actually knew what has happened your comments would be lot more well informed. They clearly are not.
ASIC are a bunch of keystone cops who actually don’t understand who/what they are regulating, where the real problems lie, they do not consult with practitioners (there’s no NTLG equivalent) and they have been shown they can’t even manage their own shop with appropriate governance and ethics.
Doddery old Hayne, like all the preceding investigations, still did NOT even investigate the problem that’s always been the root cause. Vertical integration. But we now have TMD and DDO to deal with. The biggest waste of time and red tape known to man. Good on ya Hayne.
The banks and insurance companies, after wreaking havoc, then ran away after stuffing everything up have now largely gone. So it’s only the union funds that now largely remain conflicted but allowed to prosper. And they are still pushing for more freedoms under general (unlicensed) advice.
So Robin I respectively request that refrain from public comments on matters that you clearly only have a vague and distant understanding of.