Thursday, August 06, 2015
Quality financial advice? Let the numbers speak for themselves
Will raising education standards really improve the quality of advice in this country?
Yes, no, maybe?
Probably. But let the numbers speak for themselves - read on for why, and how.
Other measures to support professionalism are needed also.
BT's GM Advice Mark Spiers, AMP Director of Channel Services Michael Paff and Infocus MD Rod Bristow landed on a number of other measures that are just as important. One of those other measures includes pre-employment checks across organisations.
In the first concurrent session of Day 2 at the Financial Services Annual Conference some of Australia's most influential executives listened to panellists and debated their contribution.
The topic was "to what degree will raising education standards ensure quality advice and how else can the advice industry drive the journey t professionalism?"
The audience included the heads of some of the country's largest and most professional dealer groups. At least two key advice CEOs were not afraid to put some clear views to the panel.
Q: If the community don't trust the planning profession - but do trust their adviser - what more can we do improve the public standing of the profession - including removing the wrong people? Given raising education standards may take a generation to improve (industry-wide) what else should or could we do now?
Improve the quality of recruits, make standards clearer for the existing advisers in transition - over perhaps three to five years. By 2022 BT modelling suggests the existing force will be up to scratch: all with: tertiary education; biannual certification; meeting financial ethical literacy and meeting annual CPD point requirements - as well as operating in an environment in which their advice is quality checked on an ongoing basis.
Some may be good right now at outing "bad apples" but we all need to be better at it, was the bottom line from panellists.
Q: If professionalism isn't possible without a qualification what of the self-regulatory professional bodies needed to deliver and enforce high standards? Ultimately who is responsible?
An independent, apolitical industry self-regulator body with a disciplinary arm - perhaps along FINRA (US) lines.
Q: Are trails being paid on hybrids?
No clear answer from the panel but if so, technology at the front line should deliver monitoring that stamps out a practice that's just not okay.
Q: How much self-regulation control should we give up in order to get to better standards?
In part it depends on the outcome of the PJC process. Perhaps a coalition of the willing, providing funding and an independent board could reprint consumers and stkaehodlers in order to get this right - perhaps in as little as a year.
Q: To what extent can the reputation of the advice profession improve without real change - which may take a long time?
Broaden the footprint of advice from the 20% who currently seek, and use, advice to the rest of the community. Get the positive messages out: about what advisers, advice and the organisations behind them contribute to the community, overall social good and the very real and positive impact on people's lives. BT Adviser View, with some 750 advisers and 2,000 pieces of client feedback, allows anyone seeking advice to judge for themselves.
The ultimate answer really comes down to numbers. Whether internally measured Net Promoter Scores, external independent ratings such as Adviser Ratings or the 4.89/5 average adviser quality rating on BT Adviser View, perhaps we can just let consumers be the final judge.
TripAdviser for financial planning consumers?
Yes. In any number of formats, whether by the institutions themselves or (ideally) outsiders like Adviser Ratings.
Perhaps we can just let those who matter most be the judge.