MIS­TRUST OF AD­VI­SORS RE­MAINS

Business First - - NEWS -

De­spite the govern­ment’s stated in­ten­tion to re­store pub­lic con­fi­dence in the fi­nance in­dus­try in the aftermath of the global fi­nan­cial cri­sis, there is still doubt about ad­vi­sors.

Al­most 48% of Aus­tralian mem­bers re­spond­ing to the Global Mar­ket Sen­ti­ment Sur­vey 2014 re­gard mis-sell­ing as the most se­ri­ous eth­i­cal is­sue fac­ing the lo­cal mar­ket in the com­ing year, ris­ing from 36% last year. The sur­vey mea­sured the opin­ion of 6,561 CFA char­ter­hold­ers and mem­bers glob­ally, 1,575 of whom are in Asia Pa­cific.

In­ter­est­ingly, con­tro­ver­sial trad­ing prac­tices such as high fre­quency trad­ing and dark pools raised less ap­pre­hen­sion amongst Aus­tralian re­spon­dents (12%), al­though it is the great­est con­cern for CFA In­sti­tute mem­bers in the United States. Within Asia, mem­bers con­sider mar­ket fraud as the most se­ri­ous eth­i­cal is­sue fac­ing their lo­cal mar­kets.

Ja­son Ch­esters, pres­i­dent of CFA So­ci­ety Perth, says, “Our Aus­tralian mem­bers are show­ing in­creas­ing con­cern that the Fu­ture of Fi­nan­cial Ad­vice (FOFA) re­forms have yet to ad­dress the is­sue of mis-sell­ing by fi­nan­cial ad­vis­ers. This is per­haps ex­ac­er­bated by in­di­ca­tions that the new govern­ment will change ‘best in­ter­est’ pro­vi­sions as part of the roll­back of FOFA. We ac­knowl­edge the govern­ment’s de­sire to re­duce red tape but en­cour­age it to im­ple­ment pol­icy that im­proves Aus­tralians’ ac­cess to high qual­ity ad­vice that is in their best in­ter­est.”

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