The financial planning shadow shopping project: Results and moving forward
An address by ASIC commissioner, Prof Berna Collier to the Australian Investors' Association annual conference, 12 June 2003.
Thank you for the invitation to speak at the AIA National Conference today. The topic on which I am about to speak is one which has sparked a great deal of interest around Australia.
Investors are clearly a group with a stake in the results, as are members of the financial planning industry, some whom I understand have been present at the conference over the last few days.
My topic of course relates to the 'Survey on the quality of financial planning advice' – an ASIC research report undertaken jointly with the Australian Consumers Association on the quality of advice provided by financial planners, which was released on 11 February 2003.
The survey is known colloquially as the 'shadow shopping survey' – hence the title of my paper.
This is the third time ASIC has undertaken a survey of this nature – we previously conducted similar surveys in relation to financial planners in 1995 and 1998.
Although the quality of advice survey is not the only work ASIC has done in this area, it has gained a level of public prominence that I think is unprecedented for the financial services sector. This report was released several months ago but it continues to spark what we consider a surprising amount of interest and concern in the media and public forum.
So for example, at the time of writing this paper in mid-May (three months after the release of the report) I was looking at a (then) current media clip from the Adelaide Advertiser of 17 May 2003, which was headed 'Avoiding the nongs', and which discussed the importance of selecting a good financial adviser.
According to our own research, at the time of writing this paper the survey has been mentioned in at least 194 Australian newspaper and magazine articles since February (and this does not include other forms of mention in the media). The survey seems to have struck a chord. It has resonated with many people, both inside and outside the consumer movement and the financial planning industry itself, and I believe it will be the catalyst for change.
Today I am going to talk about several aspects of this survey.
- I am going to look at why we undertook the survey
- I am going to look at the general results of the survey
- I am going to look at the implications of the survey for various elements of industry and regulator practice
- Looking forward, I am going to talk about follow-up actions that ASIC is planning.