The FPA planned to continue working with ASIC on future shadow shopping surveys and other programs, an FPA executive said yesterday.
The association was involved in the corporate regulator’s latest retirement shadow shop survey in terms of creating benchmarks and using its code as a reference for those benchmarks.
FPA chief professional officer Deen Sanders said involvement in the survey was important to help FPA members engage with the issue of quality of advice.
“We think it is an important role for the professional provider. There will be future opportunities, not for shadow shop, but we’re considering future programs in other areas and no doubt they’ll be rolling out and be thinking about those as we move through the year,” Sanders said.
The regulator’s most recent Shadow Shopping Study, released last month, found most poor advice occurred at the strategic advice point.
ASIC senior manager of the retail investors team Nick Coates told attendees at yesterday’s Sydney Shadow Shopping workshop that when ASIC looked at poor advice, all of it had poor strategic advice associated with it.
“When things went wrong, they went wrong at the ‘know your client’ point or the strategic advice point,” Coates said.
“Good-quality advice should follow good communication.”
ASIC found examples of poor advice were: inappropriate risk exposure, unnecessary loss of benefits or income, switches into products with higher fees but no offsetting benefits, or failure to achieve client objectives.
The majority of advice examples reviewed (58 per cent) were adequate, 39 per cent of advice was deemed poor and the remaining 3 per cent was considered good-quality advice, ASIC said.
