Fear and Greed: What should the Financial Planning industry do?

[Trevor_S]

There is already too much legislation. While I am not in the FP industry, I am in business that keeps getting swamped by more and more legislation and I have had enough and am slowly selling part of it off and getting out.

More legislation is inevitable but will only add to the problem not help. No amount of legislation will protect against shoddy operators in any industry nor against the gullible, greedy or stupid.

http://www.aifa.com.au/

If I was to use an FP, it would be a hourly rate, much the same as my doctor or dentist etc.

http://travismorien.com/invest_FAQ/content/view/240/70/

If, like me, you have concluded that the financial planning industry is mostly populated by salesmen that charge too much

 

[Dezza]

I was a Paraplanner at one of the Big 4 banks, and the amount of courses and accreditations we had to do was phenomenal. Not only that, when I first started, Statement of Advices (SoAs) use to be about 50 pages max, including appendices and product profiles. By the time I left late last year, they were up to 80 pages on average, with some more complex SoAs reaching 120+ pages.

Although ASIC released a sample SoA to outline what was needed and required by AFSL holders, the Business itself was scared of being sued for inappropriate advice if not all issues were addressed in the document. They were so scared that the "Advantages and Disadvantages" of implementing the advice were repeated 3 times in the SoA just to be sure it held up in Court.

I'm not saying it's a bad thing as it has saved their Customer Relations Department (i.e. complaints department) a bit of time and money, and also gave me a decent paying job, but sometimes we were just wondering how far it would have to go?

I also use to sit in the presentations to the clients as well with the FP, and 8 out of 10 times the FP would flick the page to the Fees section to show how much they're charging, and then flick over to the investment strategy flowchart outlining where their money is going, and that'll be it. The client would then sign away and probably file away the SoA until a time when their investments have soured and try to find a reason why.