On January 2nd I read an article in the Australian newspaper regarding financial advice and the role of advisers. I’m not usually one to make comment on financial articles because in some instances I have to agree with authors comments about the financial planning industry. I have to say that for such a well-educated man as Paul Oslington, I was more than surprised on his scathing analysis of advisers and the poor level of advice provided to people in `stressful times of their lives’.
I think what bothered me most is that he conveniently tarred all financial advisers with the same brush. What a simplistic and uneducated position to take. To quote further from the article `We need advisers who will not take advantage of vulnerable people at these times (stressful times of their lives), and advisers who have the sensitivity and skills to help the client go beneath the emotional storm to work out what their deepest concerns are and compose a plan on this basis’.
I wonder if Paul Oslington knows about the legal requirement that an adviser must ‘know their client’ before making recommendations. This rule has been in place for many years and from a compliance perspective this is all encompassing. `Knowing your client’ means you must understand the clients and those things that are most important to them. From our experience, most people don’t know exactly what they want so a meaningful conversation helps to uncover these things and then guide them to take action. Recently new legislation came into force which states that a financial adviser `must act in their client’s best interests’.
I would think that those two prominent sections of legislation provide a good brief of what a professional adviser provides to their clients. Of course there are people in the financial services industry who will cut corners and I understand if Paul was referring only to them.
From our perspective, legislation provides guidelines and consumer protection and that’s a good thing. The truth is a financial adviser who cares about their client, their wellbeing and supports them towards achieving those things that are most important to them in a unique person. This is quite a committed role and I can’t think of another profession that has this much responsibility.
How do you know if an adviser is working in your best interest? It is in the questions they ask and how they engage with you. Financial products are secondary since they are only a means to an end.
We at Planning for Prosperity take pride in being personal, caring and thorough.