In the wake of the Banking Royal Commission, the distinction between ‘product sellers’ and real Financial Advisors seems to have been lost on the media and legislators. With the misdeeds of a very few, an entire profession (there are 18,000 financial advisers in Australia) has been unfairly tarred with the same brush, and left to pick up the pieces.
This commentary recently appeared in IFA Magazine and I think it summarises our frustrations with the media coverage of the Banking Royal Commission perfectly...
Townsend’s Business and Corporate Lawyers principal Peter Townsend has defended financial advisers in the wake of the royal commission’s review of the industry and subsequent media outrage.
In a statement, Mr Townsend said the conversation around financial advisers following the royal commission’s review of the industry (which ran from Monday, 16 April till Friday, 27 April) overlooks a number of important issues.
“Financial planners in this country are copping a kicking that they just don’t deserve. Having watched the royal commission dish it out, and then read the media’s ‘outrage’, I smell a witch hunt and I simply have to point out some things which seem to have been missed in all the ‘courtroom drama’,” he said.
Mr Townsend noted that “there are in the order of 18,000” advisers in Australia, and the number of those who have appeared before the commission is not only “ridiculously small” but that sample is also already skewed.
“They’re the ones the ‘counsel assisting the commission’ have the dirt on,” Mr Townsend explained.
Additionally, the constant changes being made to legislation in the advice space means advisers need to do “much more professional development than your average solicitor” just to keep pace.
“The view that the majority of financial planners are money-hungry spivs is completely wrong. The many that I’ve dealt with have been honest, hard-working professionals who’d do just about anything to ensure their clients are well looked after,” Mr Townsend said.
“That is not to say that the issues raised before the commission are not serious, pervasive, distressing and regrettable. They need to be fixed, but the fix does not have to come by smearing all financial planners with the brush of deceit and dishonesty reserved for the dishonest, self-interested or negligent few.”
Mr Townsend said efforts should be made to better educate the public as to the role and value of financial advice, adding that confusion over the differences between product sellers and true advisers has also “been rampant” among legislators.