ASIC’s proposed shadow shopping research is a positive for Australia’s advice sector if it takes an educative approach and does not stray into an auditing process, according to an advice chief.
FPA chief executive Mark Rantall said time would tell if the corporate regulator stayed true to its word on the planned research.
“If what has been released is accurate in that they are taking an educative approach to the review, then it would be a positive thing,” Rantall said.
“It all depends on their approach. I haven’t seen anything other than the press release, which indicates that it is an educative process rather than an audit process and if that is the case, then it’s a very positive thing.”
Yesterday, ASIC commissioner Greg Medcraft announced the corporate regulator’s plan to examine the quality of financial advice in 2011 through shadow shopping research.
Medcraft said the number of Australians reaching retirement age was continuing to grow, with the current level of superannuation money in retirement products (20 per cent) likely to double in the next decade.
“It’s critical people make good decisions about their retirement and get quality retirement advice to make the most of their retirement savings,” he said.
He said in light of the Future of Financial Advice reforms, ASIC’s shadow shopping would not focus on “naming and shaming” financial advisers but was an exercise to “define good quality advice”.
The shadow shopping research also aims to improve ASIC’s understanding of how consumers and investors view and experience the retirement financial advice process; provide general feedback to the financial advice industry, in particular identifying areas where conduct needs to be improved, and identify areas of suspected misconduct for further action; encourage continued professionalism of retirement advisers and encourage people to seek financial advice when planning for retirement.
The shadow shopping will be conducted in consultation with the expert reference panel.
ASIC will release a report on the shadow shopping when the research is complete.
