One in five Australians use a financial planner — but it's not worth the risk
Once again the banking royal commission nailed it.
Take this question from counsel assisting the commission, Rowena Orr, to the head of the Association of Financial Advisers (AFA), Philip Kewin:
"How can an organisation that is seeking to make itself attractive to potential members in comparison with other industry bodies also, at the same time as seeking to make itself attractive, regulate the conduct of those members? Isn't there an inherent conflict in those two propositions?"
Mr Kewin's response?
"I don't think so."
But we now know so, thanks to the way the commission has revealed that the AFA and its rival organisation, the Financial Planning Association (FPA), tried to protect members accused of serious misconduct.
Like so-called celebrity financial planner Sam Henderson, who allegedly told his employees to impersonate a client and claimed educational qualifications he doesn't have.
Media player: "Space" to play, "M" to mute, "left" and "right" to seek.
The bodies that claim leadership of the financial planning industry are organisations that want to grow member numbers, and as Ms Orr's question to Mr Kewin indicates, they don't want to rock the boat.
So, when financial planners see a threat to the easy money gravy train of commissions and other sales-based payments, their "leaders" are quick to fall in behind and take up the cause.
And how do we know?
Because while the royal commission is getting all the headlines, another inquiry is quietly continuing in the background — an inquiry into the way accountants, who are also financial planners, get paid.
A bunch off con artists
Does anyone use a financial planner?
I don't, my accountant makes suggestions (or used to, retired recently so now i have to find a new one) when I see him about my taxes, a service I don't pay any extra for. It's his job as my accountant to tell me, especially if it concerns tax minimisation.
the whole industry is a scam