I have frequently spoken of my complete and utter disregard of Financial Advisors, a polity often composed of Wet behind the ears Youths, Ageing Insurance salesmen and Had-It ex minor Sporting stars, coaches and hangers-on.
To my surprise my good friend Sally Patten, with Leng Yeow has a report from ASIC in todays Australian Financial Review confirming my worst fears.
So most of these "Advisors" have less than one year's experience, give dodgy advice, do not understand the process and are unable to understand the clients' needs.SALLY PATTEN AND LENG YEOW
AMP has been forced to improve the oversight of its financial planners after being given a second public rap across the knuckles from the securities regulator.
The Australian Securities and Investments Commission has also demanded that the country’s biggest wealth manager – which has an army of more than 3000 financial planners – amend its advice documents, set up a program of advice reviews and introduce a training program for both planners and theirs supervisors at AMP Horizons, a wholly owned advice subsidiary.
AMP Horizons’ 75 planners generally have less than one year’s experience as fully fledged advisers, most having graduated from the AMP Horizons Academy. The academy was established in 2007 to provide education to help raise the number of planners at AMP.
“Following a surveillance of AMP Horizons, ASIC identified a number of areas that were not of the standard expected of an Australian financial services licensee,” ASIC said.
“These included the quality of the advice recommendations, aspects of the advice process ... and how clients’ reasons for seeking advice were identified.”
It is the second time ASIC has criticised AMP’s advice practices in recent years.
ASIC is like a mad Aunt, she says nothing, we say nothing and every now and then she makes a bloody show of us all and her. This has happened with AMP.In 2006, the regulator slapped it with an enforceable undertaking after it found the group failed to manage conflicts of interests in relation to the sale of in-house products.
The regulator also found AMP’s authorised representatives did not properly disclose the costs of the products it recommended or the consequences of switching super funds.
For the past six years, AMP, which controls about 20 per cent of retail superannuation and investment inflows, has been trying to clean up its act.
It is believed that ASIC conducted a review of the Horizons’ staff reviews in the middle of the year, after which AMP conducted its own investigation. It is understood that ASIC found instances where statements of advice had been filled out incorrectly and the financial advice given did not necessarily leave clients in a better position.
ASIC found "the financial advice given did not necessarily leave clients in a better position."
This bland statement means some poor fools LOST MONEY as a result of their Financial Advice, not due to bad weather, global or local reasons, but due to bad management and advice from their financial advisers.
The paragraph above reads much like a script from Sir Humphrey Appleby, of Yes Minister fame. By the time all these "supports" are in place a whole new generation of workers and families will have been fleeced by the Financial Advice and Superannuation Industry.“While the majority of customer files assessed met or exceeded our expected advice standards, there were instances where the advice was not up to the standard we expect,” an AMP spokesperson said.
“Through the review it became clear that we needed to do more to support Horizon’s planners, who are new to the profession, to give clients the high-quality advice we expect. We’ve made a number of changes which centre on closing a gap in quality control between our para-planners who provide backend support and Horizon’s planners.”
ASIC said AMP had “co-operated fully” with its inquiries.
“ASIC commends AMP for its positive response to the concerns identified by ASIC,” said Peter Kell, a commissioner.
This is totally inadequate preparation for Financial Advice given the complexity of Markets in 2012.Before planners are employed by AMP Horizons, they undertake a 10-week intensive course and have nine months of professional training, often giving simple advice to clients under supervision.
It is understood that AMP Horizons will also employ more para-planners, who typically provide administrative support.
Horizons Academy is a melting pot of fresh-faced graduates, ex-mortgage brokers, retired sports people and other people looking for a new career.
The mix of "advisers" is the same.
They more resemble pimply youth from the Church of Jesus Christ of Latter Day Saints , Mormons, who call when one is in flagrente of an afternoon, or and that ARL Player one avoids in the Casino.
This is the most damning of the comments in this excellent article from the Australian Financial Review. The answers to the questions for the course exam must be hawked around gyms free with the steroids.The only prerequisite for membership is PS 146, the minimum standard for entry into financial planning – a course that can be completed in days.
To read the whole article , go to
I have engaged Westpac to negotiate a free 1 month subscription to the AFR, for ASF members, particularly suited to those poor bastards who have used a Financial Adviser over the last 20 years, and probably cannot afford the sub.
go to http://afr.com.au to get your password for a months free online AFR.
I hold stock in FXJ and WBC.