Whilst highly unlikely to be as popular as the hit TV show ‘Breaking Bad’, ABC will be airing ‘Banking Bad’ at 8.30pm tonight. Banking Bad is from an investigation by ABC and Fairfax and is expected to air the practices of certain unscrupulous Financial Planners in the Commonwealth Bank.
The Commonwealth Bank has already issued a statement stating none of the advisers remain employed by Commonwealth. Interestingly the main culprit, Rollo Sheriff, was an adviser at Financial Wisdom and his clients were compensated by approximately $7 million. I have recently done a blog on the relationship between product providers (eg. CBA) and the different bodies they use to licence Financial Planners.
It would appear that ASIC will be under attack in the Banking Bad show as they too have already issued a statement, and also a YouTube video. I will state that in my dealings with ASIC I have encountered nothing but professionalism and pro-activeness. For example a few months ago I had two ASIC Officers visit me and ask a few questions about Cornish Wealth Management and also offer to discuss any issues or questions I may have on legislation. I presume they wanted to get an idea on whether I was a fit person to run a Financial Planning business, and I congratulate them on that.
As ASIC’s Deputy Chairman, Peter Kell, states in the video, “What CFP (Commonwealth Financial Planning) did six years ago was simply unacceptable, Commonwealth Financial Planners were giving very poor advice to clients, driven by conflicted commission payments. This was part of a wider problem of unacceptable standards and conflicts of interests right across the financial planning industry.”
As alluded to in my article, ‘Don’t Invest With Anyone Under the Influence‘, I suspect the solution is to break the nexus between product providers and their ability to licence financial planners. I can see no reason for product providers to licence financial planners except for product distribution purposes.
At Cornish Wealth Management, being independent financial advisers means we focus on selling advice, not products.