{"id":14968,"date":"2012-03-28T09:49:08","date_gmt":"2012-03-27T23:49:08","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=14968"},"modified":"2012-03-28T11:29:25","modified_gmt":"2012-03-28T01:29:25","slug":"asic-shadow-shop-shows-room-for-improvement","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2012\/03\/28\/asic-shadow-shop-shows-room-for-improvement\/","title":{"rendered":"ASIC Shadow Shop Warning &#8211; Room for Improvement"},"content":{"rendered":"<p>The Australian Securities and Investments Commission (ASIC) has issued a warning to the advice industry, saying there are several areas where advisers need to &#8216;lift their game.&#8217;<\/p>\n<p><!--more-->The warning comes as a result of ASIC&#8217;s latest Shadow Shopping study, which found just 3% of advice provided was deemed to be of \u00a0&#8216;good quality&#8217;, while 39% of the advice examples were poor and 58% were considered adequate.<\/p>\n<p>The Shadow Shop reviewed 64 examples of personal financial advice given to real consumers.\u00a0 The advice was then graded as good, adequate or poor, based on a series of benchmarks determined by an expert panel.\u00a0 The review found just two examples of good advice, compared with 37 adequate advice examples and 25 poor examples.<\/p>\n<p>ASIC Commissioner, <strong>Peter Kell<\/strong>, said the research demonstrated there was scope for significant improvement in the provision of good quality advice.<\/p>\n<p>&#8220;Too much poor advice provided to our shadow shoppers was overly product focused and not strategic enough to help clients develop a realistic and achievable plan for their retirement and make the most of their financial resources taking into account their circumstances and attitudes to risk,&#8221; he said.<\/p>\n<p>While the Shadow Shop focused on retirement advice, it identified a number of common problem areas that ASIC is likely to continue to investigate.\u00a0 They include:<\/p>\n<ul>\n<li>Inaccurate or incomplete investigations of a client&#8217;s personal circumstances<\/li>\n<li>Strategies that do not address the client&#8217;s needs or objectives<\/li>\n<li>Poor scoping of advice, where advisers exclude crucial topics, such as clients&#8217; debts, from the scope of the advice, or fail to clearly explain the limitations of the advice<\/li>\n<li>Failure to provide appropriate justification for switching recommendations<\/li>\n<li>Poor communication in a Statement of Advice<\/li>\n<\/ul>\n<p>The study also found that advice customers had difficulty assessing the quality of the advice they received, with 86% of participants saying they felt they had received good advice, and 81% saying they trusted the advice they received from their adviser &#8216;a lot&#8217;.<\/p>\n<h6>This underlines the importance for the industry to&#8230; improve overall professional standards to ensure that their client&#8217;s trust is not misplaced<\/h6>\n<p>&#8220;Advisers are important gatekeepers who have a key role to play in helping consumers plan and manage their finances,&#8221; Mr Kell said. &#8220;This underlines the importance for the industry to remove conflicts of interest and improve overall professional standards to ensure that their client&#8217;s trust is not misplaced.&#8221;<\/p>\n<p>As a result of the study, ASIC said there were a number of areas where the advice industry, consumer groups and the Commission could work together to improve the quality of financial advice.\u00a0 This may include further shadow shopping as recommended by the Parliamentary Joint Committee on Corporations and Financial Services report into the Future of Financial Advice reforms.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Australian Securities and Investments Commission (ASIC) has issued a warning to the advice industry, saying there are several areas where advisers need to &#8216;lift their game.&#8217;<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8],"tags":[],"class_list":["post-14968","post","type-post","status-publish","format-standard","category-associations","category-compliance-regulation"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/14968","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=14968"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/14968\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=14968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=14968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=14968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}