Consumer says standard of advice has not improved
The Consumers' Institute has repeated its survey of financial planners and the news is not good.
Monday, February 22nd 1999, 12:00AM
Financial advisers are about to get another hammering from the Consumers' Institute.The institute has repeated a "blind test" of advisers it did in Christchurch last year, but this time has surveyed 14 advisers in Auckland.
Although the article isn't due to be published until March, the institute has said the results aren't flattering for the advisory industry.
Last year Consumer concluded that none of the 16 planners surveyed "managed to provide, independent, sound advice, presented well and properly tailored to the client's needs, at a reasonable fee."
"We think this is disgraceful," the article said last year.
Its test involved a "client" (woman, 40, married, children and mortgage of just over $100,000) visiting 14 advisers telling them she was about to inherit $60,000. She wanted to know where to invest the money for her retirement.
Consumer then ranked the advice and service given against what it believed was the correct approach.
It ranked 11 categories including; questions, reports, disclosure and independence along with whether the adviser used growth funds, index funds, put some money overseas and considered the mortgage in the plan.
Financial Planners and Investment Advisers Association (FPIAA) co-president David Milner says he is "disappointed" with the latest survey results, however he is pleased the institute has put "advisers under the spotlight."
He says the industry needs to raise its standards and that is something the FPIAA hopes to achieve.
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