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At last you can pool your cash with... Medical aids need to wise up to the need... Don't let perks tax force you into the s... Crystal balls cloud over on direction of... UNIT TRUSTS: Investec Worldwid... Consumers dragged into credit overloa... Drowning in debt? Here's how to resurfac... I knew I was in deep when the valuator w... New kids on the block pack a punc... It's time to afford our investors some p... |
It's time to afford our investors some proper protection
In the second of our series of guest columns by leading lights in the financial services industry, GEORG MIKULA, executive director of Guardbank Management Corporation, looks at the regulation of financial advisers
We discussed the licensing of financial advisers, a subject of heated public debate in Australia and here. Mainly in response to public criticism of the standard of investment advice, the commission decided in 1994 to review its requirements. It stated as its objective "to promote efficiency, honesty and fairness in investment advice by improving the quality of advisory services in Australia", and gave as the three key components of the Review: It found that the major problem areas were: The commission believes that regulation will improve the advisory process significantly. It accordingly made some key proposals: As the commission licences all distributors, the Australian investment-advice licensee has to listen carefully to the commission. As a result, the intermediary is striving to become an investment professional and I was impressed with the calibre of advisers I met. I am told that "fly-by-nights" have largely disappeared. Just how serious Australia takes the responsibility of the intermediary to give good advice is demonstrated by a recent court case, where an adviser was convicted of not adequately explaining the risks in a particular proposal he made. As the unit-trust industry grows in leaps and bounds, I wonder if our SA intermediaries are adequately prepared, and controlled, to give good advice - especially to a public less sophisticated than the Australians. Good professional advice lies at the heart of the financial business and we as the "manufacturers" of the financial products have a grave responsibility to ensure it is provided. I feel that at present investors equate good advice with picking short-term performers. What it should be is this: Providing relevant and correct financial solutions using a disciplined process based on skills and knowledge. Judging from my personal observations I believe that generally the Australians get closer to this ideal than we do in South Africa. Top of page
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