News

Financial advisors have become ubiquitous in Perth and for good reason. The current financial climate can be confusing with so many options and variables. More and more people are turning to professionals for help in managing their money. There are a lot of financial advisors out there and we are constantly asked how clients know they are choosing the “right” financial advisor.

We thought it might be productive to provide you with what the government has to say about finding a financial advisor. Remember that all information here is general and that none of it should be taken as specific financial advice or as a substitute for a personal, one on one meeting with a financial planner.

Referrals

The Australian Securities and Investments Commission (ASIC) notes what they feel are the two best places to find referrals: The first is professional associations. They mention the Financial Planning Association and The Association of Financial Planners, for example. Their second choice is to ask people you know if they are satisfied with their financial planner. When you find one who is happy with theirs, you can ask for the planner’s name.*

At Approved Financial Planners, we offer financial planning and other services to residents in the Perth area and across WA. We now have the benefit of having AMP Australia as a parent company. We chose to partner with AMP because they embody the same commitment to professional, ethical service that we do.

We are on the side of high standards for the entire financial planning and financial advising industry, making AMP the perfect parent company for us. Consequently, we were proud to hear of remarks made by AMP Limited CEO Craig Meller recently, addressing what our industry currently defines as “financial advice.”

Mr Meller was speaking about vertical integration, a model practised by AMP. During the speech, the subject of financial advice arose. He questioned the nature of financial advice as practised by many in the industry. According to Mr Meller, “Too many…self-interested parties…dumb down the definition of financial advice to (only include) product selection.” *

Mr Meller would go on to opine that this kind of “advice” was usually meant to “justify a certain position” and that it is “a million miles away from where the true value of advice lies.” *

Financial planners and advisers in Perth and across Australia were quite interested in a recent statement from Senator Mathias Cormann, Minister for Finance and Acting Minister for Financial Services. According to Senator Cormann, the Australian Securities and Investment Commission (ASIC) is legally empowered to decide when and how to raise the minimum educational standards for all financial planners according to its own criteria. *

Senator Cormann made the statement in a radio interview in Sydney when asked about the Government’s recent changes to legislation known as “FOFA” or “Future of Financial Advice.” Many within the industry have criticised current conditions as allowing people to complete a four day course and then call themselves “financial planners.” *

Senator Cormann not only said that the Government is interested in raising educational standards for financial planners, but that ASIC could also raise the standards if they wished. According to Senator Cormann, “ASIC actually has the responsibility to set the minimum educational standards.” Senator Cormann then encouraged ASIC to raise standards if they feel it is appropriate. *

Senator Cormann said that the Government is working hard to “lift professional, ethical and educational standards” for financial advisers and that the Government is also working on an “enhanced public register of financial advisers.” *