Planners ignore failings: survey

Just a short time after a damning report was released on Australia's financial planning industry, a new survey has found that 29 per cent of advisers are not willing to address the major failings highlighted in the report. However, 48 per cent of the 702 advisers surveyed admitted that there's a crisis of confidence in the industry.

Although most of the respondents agreed that criticisms in the recent Australian Securities & Investments Commission and Australian Consumers' Association report were valid, only 51 per cent thought the Financial Services Reform Act would make a positive impact on the quality of client advice. Eighty-nine per cent of the respondents thought their companies were already meeting the required standards of disclosure well or very well.

The full FSRA will come into effect in March 2004 and require planners to product recommendations from which they get commissions. The ASIC/ACA report was particularly critical of the commission-driven nature of the financial planning industry. The new survey found that more that 75 per cent of planners operate on a commission basis, although 42 per cent of them think it's a problem. The latest survey was carried out by the Securities Institute of Australia and the IFA Magazine.