In a recent post, I got fairly fired up about a 4 Corners episode which had explored the shortcomings of Commonwealth Financial planning and in particular one of its advisers.
For me the episode missed the point. Sure there was the guy from Wollongong who dies before his life insurance was paid out, and had to fight CFP in the courts to get his entitlement, there was the ex-school teacher who had lost half his savings, there was the ex Qantas pilot battling with dementia who had lost substantial sums. These are all sad stories, which have had a devastating effect on the people concerned and their families, and they made for compelling viewing.
What offended me was that even if these sad stories had not been told, even if people had not lost money, the poor advice was at the heart of the matter. Even if there had been a positive outcome, even if no-one had lost money, even if the insurance claim had been paid out, the CFP story was yet another example where rogue advisers had let their clients down, and sadly the episode focused too much on the outcome and not enough on the advice. I understand that this is television and we need to make it simple, but when an entire profession is in the firing line, surely the full story should be told.
Bad advice remains bad even if there is a positive outcome in the short term. Good advice can sometimes produce negative results in the short term.
An example from outside the financial advice world might serve to illustrate. Let’s say I got to see a mechanic because my car exhaust is dragging on the ground. Bad Advice “Tie it up with duct tape” might produce a good short term outcome, I get to drive away and get to work on time. Good Advice “You’ll need to leave it with me so I can replace the mounting bolts” will cost me a taxi fare and make me late. The medium to long term outcome of the advice is pretty clear.
A robust advice process, carried out by a reputable adviser, followed by well thought out advice will maximise the likelihood that a client will meet their goals over the medium to long term. By focusing on the short term outcomes experienced by the admittedly wronged clients mentioned in the episode, there was no opportunity to tell this positive story. Additionally, the episode missed the chance to provide any warning signs in relation to what to look out for when consulting an adviser, much less explain what to look for in a good adviser. As a consequence all advisers were lumped together in the public mind once again, and this got me steamed.
I am proud of what our profession does in the main. Some of my peers are amongst the smartest people I have ever met, and I am lucky to call some brilliant advisers friend. For these professionals, service, honesty, integrity and professionalism are just a given, the challenge is to give more Australians the opportunity to obtain quality advice, because we passionately believe that everyone can benefit from it. The 4 Corners episode did nothing to help us in this endeavour, and if we allow it, will only deter more Australians from obtaining the help that they need, and that benefits no-one.
I was so upset by the program, I made this short video – take a look if you have feel inclined