5 Nov 2009

'Not surprised' by scathing financial advice review

10:20 pm on 5 November 2009

A former president of the professional body for financial advisers says he's not surprised by a scathing assessment of the industry.

The watchdog Consumer New Zealand has published a report on financial advice after sending out mystery shoppers to 33 firms to spend two hours getting advice on investment and pre-retirement planning.

The results make dismal reading, with only 17 advisers providing written investment plans. A review by an expert panel failed all but three.

Consumer New Zealand says that in general the advice was "scandalously poor" and the industry appeared to have learned nothing from its recent bad press over failed investment companies.

The former president of the Institute of Financial Advisers, Simon Hassan, says the industry is young and has not performed well in a lightly regulated environment.

He hopes, however, that the standard of financial advice will improve as new laws are implemented next year.