MISTRUST OF ADVISORS REMAINS
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.”