Watchdog snarls at financial advice sector 

Source: ONE NewsStacking money

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Consumer watchdog Consumer NZ is calling for changes in the financial advice industry after finding that advice given was "scandalously poor".

The organisation mystery-shopped 33 financial advisers across the board from large institutions, sharebrokers and nationwide adviser chains to small firms.

Consumer NZ CEO Sue Chetwin says only three of 17 advisers produced plans that were rated "good" by the expert panel. The other plans were rated as "disappointing" or were rejected.

"So many issues were found it was hard to know where to start. There was poor analysis, unclear costs, advisers portraying themselves as independent when they were not, high costs and bad products," Chetwin says.

She says some of the advice was impossible to comprehend, even by the expert panel.

"It was not a matter of financial literacy, the information itself was poor, so even if you wanted to understand it you couldn't."

The organisation is also concerned about the lack of proper disclosure of fees.

"This is an industry which is in serious need of reform," says Chetwin.

Consumer NZ says self regulation of the industry is not working and the government needs to come up with practical and immediate protection for consumers.

Breakfast spoke with Chetwin about the findings. Click on the Watch tab.