In an article for the website Herald Sun, Jeff Kennett talks about the expanding need for financial advisers and why they will become an even more vital cog in the wheel in the future. This said, Kennett is convinced that the same advisers will have to be “specifically trained” in their jobs and be of unquestionable moral conduct.
Financial planners hunting for commissions are the real culprits
Where is Kennett’s grievance surfacing from? He asserts that despite a large number of financial operators plying their trade honestly, there are always a percentage of planners who are on the hunt for commissions and bonuses. What makes the matters worse is the involvement of revered advisers who encourage them to lure aging clients into the game.
An unworthy product robs clients of their savings
This way, the clients who have toiled their lifetimes to create some wealth are introduced to some “shonky product” that snatches a good amount of their savings and even force them to borrow against their asset. Why all this? Only because the planners and advisers are lured by the smart commissions and bonuses attached with such deals.
Do you work for a commission, Mr. Adviser?
Not for a moment do they ponder over the plight of the senior citizens who are already woefully short of a decent retirement nest egg. Kennett calls for tighter rules which can keep the nefarious dealings at bay. Clients must ask their financial advisers/planners if they are working for a commission or a pre-stipulated fee. If they answer “I work for a commission”, clients should politely show them the door.
No test to evaluate financial planners in Australia
Many countries have a minimum criterion at place for registering someone as a financial adviser. Some call it the series 7 exam. No such evaluation is conducted in Australia and it is a sorry statement on our regulatory practices.
Are you eligible to make real estate investment recommendations, Mr. Adviser?
Kennett also seems furious on the question of a Super’s or SMSF’s investment into real estate. Developers are increasingly looking forward to the services of financial planners rather than real estate agents to sell a home. After all, they know that the planners can always make a case for “borrowing against the fund” even if a prospective client is short on money.
You can read the original article here.
This is all heading towards a dark place in my opinion. From immediate effect, only those advisers accredited by the Australian Financial Services (AFS) should be allowed to make recommendations on real estate investments.
Super fund, however frugal, is our only light to meet the dark corners of our post-retirement life. Borrowing heavily against it to buy properties which are a great deal overpriced (there is a deal between the financial planners and developers) can make matters only worse for you.
I ditto Kennett’s feeling wherein he says that we will need a lot more conscientious financial advisers and planners in the future. They will be vested with great powers by the masses and they must not forget the cliché, “with great power comes great responsibility”.
Have you felt fleeced by a real estate agent offering financial advice about your Super fund or SMSF?
