OPINION: Are we letting our industry down?

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Some insurance suppliers are circumventing most adviser compliance red tape by simply offering risk insurance through their website resulting in a phone call response to initiate. This isn’t good enough, says Paul Levy CFP JP LREA, a financial advisor with over 37 years’ experience.

I have held senior roles at state manager level and advised mums and dads, high net worth individuals, professionals and SMSFs.

I have seen our wonderful industry undergo dramatic and major regulatory changes over the years with profound impact on how we as an industry are expected to behave, the records and files we are expected to keep and the quality of advice we are expected to give and the massive amount of liability we have to carry.

Compliance and FoFA have become the most important and costly contributors to the running of any financial planning business.

I read an article only this week saying that John Borgden, CEO of the Financial Services Council, has highlighted the severe pressures that FoFA is placing on the independent adviser market, and has described their future as “very marginal”.

Brogden said: “The changes in FoFA really have squeezed the independent financial adviser market”.

Imagine my surprise and disgust when I recently found out, from personal experience, how easy it is for some suppliers to circumvent most adviser compliance red tape by simply offering risk insurance through their website resulting in a phone call response to initiate the application.

Buy your life insurance over the phone from certain outlets that seem to be exempt from having to satisfy the ‘know your client rule’; ‘disclosure’; conduct a fact find or needs analysis; or keep files and notes like we do.

Just talk to some pipsqueak who has been in the industry for about 10 minutes, is nowhere near as qualified as most of my colleagues in the industry and does not seem to have to enter the same world of painful and costly compliance that I and my colleagues are forced to face each and every day.

I call upon our industry bodies to take up this fight on our behalf. Help preserve our jobs and our future. Help stamp out inequality that seems to be erupting.

I call upon my industry colleagues to voice their opinions in support and help maintain a level playing field.

If there is going to be such heavy regulation, impose it on everyone!

  • Bob Angel on 13/12/2012 1:02:44 PM

    If our industry bodies do not take up the fight, perhaps it is time for the advisers to have a long hard look at what they are actually doing for us, are they relevant?

  • Mark Thompson on 13/12/2012 1:30:59 PM

    Eventaully all of this bad advice will bear rotten fruit which will, unfortuately, splatter over the righteous as well.

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