Consumers may be forgiven for seeing some unlikely parallels in the frozen berry contamination scare and the compromised NAB financial planner headlines. Certainly contracting Hepatitis A from a smoothie seems more immediately alarming than having one’s savings slowly milked by the shortcomings of ‘inappropriate’ advice.
But similar issues around labelling, regulation, alert-raising and political inertia pervade both areas -- directly diluting our ability to make informed choices and rely on presumed protections around our money and our life. Much has been made of the gaps and confusion in Australia’s country of origin food labels meaning it’s hard to know where stuff comes from. The ACCC has a handy 30-page guide.
Yet it’s also hard to know just who owns or licences your friendly financial planner short of interrogating various product disclosure statements, financial services guides and the like. The complexity and lack of plain speaking as to the origins and allegiances of imported food and home-grown financial advice do the consumer no favours.
There’s nothing intrinsically wrong with blueberries from China or planners aligned to the CBA but in both cases there’s been some evidence of rottenness in the systems. So isn’t it fair enough to declare openly where you come from, or who owns you, and let others make up their minds how your offerings stack up?
Both areas also suffer, given their present woes, from inadequate regulation and a surveillance level at far lower levels than the public might reasonably expect. Only 5% of imported foodstuffs are tested and then only for residues, which can do long-term damage, and not microbes, which tend to create more immediate symptoms.
The renewed calls for a royal commission into financial planning and ASIC highlight similar concerns about the range and depth of surveillance around this industry. In both the NAB and berry scares the alert as to the existence and extent of the consumer detriment was not raised by the bank’s or the producer’s internal systems.
It was doctors’ detective work with their patients which pointed the finger at the suspect fruit and it was customer’s complaints as their worst suspicions were realised that made the NAB sit up and do something. The bank fired and eased out 31 planners some of whom have gone onto practice their craft elsewhere free from any sanction. It also paid more than $10m compensation.
And incredibly there’s more chance of cleaning up and controlling risky imports of Hep A berries from China than providing consumers with the same protections from infectious, incompetent and insensitive planners here.
The final common ground is government’s inability to make change where it’s needed. Both sides of government have sat for some years on a bio-security report implementation of which may have, if not preventing the berry issue, have assuaged public concern. Likewise for sometime both sides of government have kicked around legislation around financial advice, implementation of which might not solve all the problems but would go some way to addressing them.
My belief is that in six months to a year the berry scare will be largely forgotten and the issue addressed but the crisis in confidence around planners will still be far from resolved.
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Comments3
"Clearly an article written by someone with no formal education in journalism! Will placing provisions on imported goods or provisions on educational requirements prevent these outcomes in the future? Perhaps time spent on working towards a solution rather than chastising and laying blame on the past might produce the outcomes we all seek. "
Lea van der Hoek 15:23 on 28 Feb 15
"Burn! Firstly a person is either ethical or not. Who they are employed by or how they are paid does not determine a persons integrity. To imply that financial advisers are 'infectious, incompetent and insensitive' is an insult to the vast majority who understand that their clients are the soul of their businesses without whom they would have no business. And before you suggest that you are not generalising there was certainly no effort in the above slop to do so. Secondly there has been much coverage of alleged false and misleading information having been provided to clients of financial institutions in the past. If this has occurred there should be appropriate consequences. No question. But why stop there? What about journalists who fail to disclose the full picture or make false, incomplete or misleading statements in order to promote their own personal brand and self interest? Why do you, Chris, have a right to paint not even half a picture and pontificate over an industry that you clearly know very little about? This is a joke , a decent journalist would at least be able to find a unique angle. Be careful not to fall off that bandwagon. "
Jimmy 15:16 on 26 Feb 15
"Wow, a literary genius. Chris you must be sitting back thinking how smart and clever you are. This is an absolute load of rubbish. In a good article, you may have actually researched what had occurred, what action was taken, and why - and perhaps made comment as to whether you thought his was well handled or proposed an alternative better solution. If I am ill, has my doctor found this without me knowing? Absolutely not. They will give me 15 minutes in a months time after I have found a problem myself, and then give me a general view and send me on my way. No accurate diagnosis, no follow up, no care, just the bill and a referral to the chemist for some medication that they get a kickback from. You seem to rate doctors highly as a profession for the reference to Hep A. Then there is the property spruiking market, accountants flogging SMSF's, small licensees and own licensees that have a bigger percentage of complaints but have not paid the compensation required, etc etc. There are many people who should not be part of what people want this industry to be, but this should be differentiated as a 'product seller' and a 'financial adviser'. From there, the saying goes "if you can ... do ..... if you can't, either teach or be a journalist"."
Private Reply 12:59 on 26 Feb 15