Providers need to win back public trust: English

I'm assuming that Annamaria Lusardi's comments in the article have been taken out of context, as I'm unsure of the link between "improving financial literacy" and the reduction of the complexity of the products available.

Philosophically, I believe that such full transparency should be sufficient to relegate the ‘fees versus commission’ discussion into being just a ‘preferred method a billing’ debate. However, we should expect the same outcome as is being implemented in Australian industry, whereby fees only advice is becoming the regulated and sole compensation mechanism to permanently separate the “product choice from the compensation”, and to reinforce professionalism. This is likely to occur in Australia as a result of separate but equivalent agreement between the funds and the financial planning associations and their members (to be introduced next year and enforced by 2012).

I was at the Symposium and heard the speech by Bill English. I have also double checked by listening to the speech again using http://www.financialliteracy.org.nz/news/events/financial-literacy-09/presentations/hon-bill-english

What he actually said was not "financial advisers" but "Product providers want people to buy their products or agree with their opinion or come to their institution."

So a rather different message than in the headline and article.

How interesting. Bill English wants financial advisers to lift their game to help the industry shed the image of distrust. Damn good idea Bill wish I had thought of that one first. Clayton Copplestone thinks transparency of 'fees versus commission' should help, well maybe that will lift 'professionalism', Clayton. To this day none of my clients have a problem with my business being paid for the services we provide as long as the fees are disclosed correctly so this may or may not be a problem. More to the point about 'adviser professionalism', it's simply an easy wipping board for someone to latch onto I think.
But i'll tell you why the public mistrust fiancial advisers.
It's because we live in a toothless regulatory environment that allows companies like ING, significant players in the market place (default KiwiSaver provider are they not?) to get away with losing 80% of 14,000 customers money, blaming misread 'market conditions' and other fanciful reasons and then screwing these same customers with a 'commercial offer' that seals in a 40% loss due to the blackmail release form requirement. All praise to the financial advisers who tried to get a full product recall and get ING to do the proper thing and recall a failed product. It was not only for our clients but for the industry as a whole. This bitter cup taste is going linger long in investors minds and financial advisers attempting to recommend any managed fund product are going to be challenged doing so. ING could have acknowledged their inability to deliver the extensive and repeated promises they made about their funds and recalled the product - just like has been with similar cases in USA, Canada, and Great Britain to name a few. That could have been a midas touch for them, but instead they chose the route of toughing it out, taking the abuse and admitting nothing. Thank god for Bell Gully eh? However, by contrast it is the advisers who stood up and were counted for the betterment of our industry even if they may have failed to bring accountability so far that deserve credit. That took character, back bone and strength amidst powerful forces against them; would have been easy to simply wimp out and 'keep my head down' as was heard from so often.
And just so I am seen to be totally unbiased, Bill, how come Rod Petricievic is still not in jail? In USA we find Madoff in the slammer literally weeks from being accused and now set for another 150 years.... hymmm, only about 6 months later Bill. Before you go around slagging off on financial advisers get your machinery and mechanisms working so that cheating and thieving has no place in New Zealand any longer. Only then we will see public distrust start to disappear.

Thanks David, We've updated the story.
Clayton,
The statement wasn't taken out of context, as it was the answer to a fairly direct question. Annamaria's point was that if the products are so difficult as to make experts struggle, by removing the complexity you make it easier for everyone to understand, and was a very simple way to lift literacy and accessibility. I've tweaked the story a touch to make this a littler clearer.
Fully agree in regard to following Australia's lead - it's something we kiwis seem to do rather well.
Thanks for reading and commenting,
Paul.