Scott Francis in his latest Eureka Report article adds to the various points of discussion surrounding the government's proposed reforms on financial advice. Scott highlights two areas of reform which the government has chosen to avoid. The first is addressing the qualifications required of a financial adviser, and the second is the conflict of interest that occurs when a financial adviser is employed by a financial service product provider – as most financial planners are.
Scott concludes that the structural corruption of the financial services industry remains as long as financial product providers – from big financial service firms like AMP and the big banks through to industry super funds – can employ financial planners, who naturally are in a position that is susceptible to influence.
Further, the lack of a reasonable minimum educational standard means that even those financial planners who are driven to act in the best interest of clients may not have the knowledge to do so – which makes them and their clients still vulnerable to poor quality advice.