The Banking Royal Commission has delivered a scathing interim report on the practices of the financial planning industry. Unfortunately, it’s not just a question of a few bad apples, but systemic dishonesty and endemic greed amongst financial planners.
The interim report said:
- Charging for doing what you do not do is dishonest.
- Giving advice that does not serve the client’s interests but profits the adviser is equally dishonest.
- No matter whether the motive is called ‘greed’, ‘avarice’ or ‘pursuit of profit’, the conduct ignores basic standards of honesty.
- Its prevalence and persistence require consideration of the issues of culture, regulation and structure.
Commissioner Hayne said ‘the heart of the problems in the financial planning industry is the conflicted payment model where advisers are paid to sell products rather than advice. Sales staff can be rewarded by commission; advisers should not be’.