The Financial Planning Association (FPA) welcomes all moves that promote the value of financial planning advice, encouraging ISN members to make sure their advice meets with the professional standards of the FPA.

“We know it’s difficult for Super Fund members to trust whether they’re in the right fund or getting the right advice,” said FPA CEO Mark Rantall. “However cost and the way a Financial Planner charges for their services should not be the primary focus as is the case with the current ISN advertisements.”

“If there is a crisis of confidence in Superannuation funds, financial markets and advice more generally, it should encourage people to make sure they’re getting the best advice and that the advice they’re getting takes into account their own and their family’s complete financial circumstances, not just their superannuation needs.”

The FPA continues to receive widespread support for its new strategic plan to make it a true professional association, providing even greater confidence in professional advice for all Australians. The introduction of the new strategy, to be voted on by members in April, will be supported by a national advertising campaign to promote the benefits of seeking advice from FPA members.

Research shows that financial planners with the full range of FPA expertise are the preferred source of advice for people considering their retirement.

The FPA offers a checklist for consumers whether using a certified financial planner or an adviser within your Super Fund:

1. No client should pay fees or commissions (or cross subsidised fees from other fund members or any other form of fee) if they are not in receipt of professional services.

• • Check your Super Fund statement and with your Financial Planner to make sure you are not paying fees for services you don’t get.

2. No client should have their investment advice services paid for by Super Funds or any other product providers because you then can’t be sure whose interest they are acting in. FPA members have already committed to full product and advice transparency and the banning of commissions for investment products.

• • Check with your product provider adviser (Super Fund or other) to make sure you’re paying for the advice you receive – you deserve to know they’re interested in only your future and not theirs or other members.

3. No client should be forced into the formula advice a product provider or financial planner wants to offer you. Your retirement future is all about you and your family and you deserve to make an informed choice about the right services for you. In many instances the right choice will be to call your super fund and get the advice they can offer only within the scope of their product capabilities.

• • Check with your advice provider (Super Fund or Financial Planner) and ask them about the choices of advice and financial strategies for your future. It’s your choice and your future.

4. Every client deserves the maximum consumer protection available when getting advice.  Financial Advice is complex, even when it’s only about Superannuation. Different product providers and Super Funds have different limitations on their liability for the advice they give you. Only Financial Planners, fully authorised under the Corporations Act are subject to the full obligations of the Corporations Act and only FPA members are required to maintain professional obligations over and above the law.

• • Check with your Financial Planner (they might work for your Super Fund or outside of a product provider). Is the advice they’re offering you subject to Corporations Act and have they met the full professional obligations as members of the FPA?

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Mr Klipin said that endless debate about adviser remuneration is clouding the real issues which are inadequate levels of retirement savings and chronic levels of underinsurance.

“There is now a plethora of research supporting the fact that if commissions are banned, many ordinary Australians will not seek life insurance advice,” Mr Klipin said. “Without advice, Australians are often significantly underinsured or more commonly, and more worryingly, not insured at all.”

Mr Klipin referenced a Zurich consumer survey conducted in December last year, that paints a bleak future in which many ordinary Australians will not be able to afford life insurance advice if commissions are banned.

“All the noise about remuneration has railroaded the real issue which is consumer protection,” Mr Klipin said. “People need financial protection against life’s uncertainties. This summer’s floods and cyclones, last summer’s bushfires all served to highlight that need. Let’s not wait for the next natural disaster to tell us again what we already know – that people’s lives are worth insuring.”

Underinsurance is expected to cost the federal government $1.3 billion over the next 10 years, according to the Lifewise/NATSEM Underinsurance Report released in February 2010.

Mr Klipin said lobby groups with vested interests which attempt to camouflage the issue of underinsurance with an unnecessary debate about adviser remuneration do consumers a great disservice.

“These groups clearly have their own agenda and are working in their own, rather than the consumer’s best interest,” Mr Klipin said. “We are calling on Mr Shorten to work with us to help protect consumers against the financial impact of death or disaster and to resist tinkering with a remuneration system which is not broken.”

The AFA will shortly be undertaking the third tranche of its consumer/adviser research. The research, which is sponsored by AIA and conducted by Coredata/brandmanagement, will investigate why people – including those who use financial advisers and those who don’t – seek life insurance cover.

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It is anticipated that the Trustmark will be used much like the Heart Foundation Tick for healthy foods, with the Trustmark helping Australian consumers identify quality financial products and services that meet the high standards set by the Financial Services Council.

Australians will see the Trustmark on financial products and services issued by members of the Financial Services Council including companies in the superannuation and life insurance industries.  Companies wishing to use the Trustmark must adhere to the 16 standards administered by the Financial Services Council, some of which relate to fee structures and product commissions.

Launching the campaign, John Brogden, CEO of the Financial Services Council said: “Thousands of mum and dad investors lost their life savings in recent financial collapses such as Storm Financial.  This has left many Australians wary of investing and in need of a signpost for financial products and services that are committed to high quality, transparency and bound by high standards.

“The introduction of the Trustmark is a positive move to ensure tighter compliance with standards and will provide Australians with the confidence they need when making financial decisions – from the management of their super contributions to the selection of their life insurance provider.  The Trustmark will ultimately ensure that Australians know and trust who they are dealing with”

The Trustmark will be introduced from 1 January 2011 and consumers should expect to see the Trustmark used from this date.

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