Dodgy Financial Advice, Explained Using Dogs

Revelation number one from the Royal Commission into Bankers Behaving Badly wasn't that AMP is run by a pack of crooks – we already knew that.

Instead, it’s been the discovery of a new Superhero: Rowena Orr QC.

All week, Ms Orr’s been dissecting a string of lying, conniving financiers and shown that the financial planning industry is not much more than a moneymaking scam (but not for clients).

So far, everything from the dodgy (charging your dead uncle advice fees) to the outright criminal (buying a penthouse with your clients’ money) has been exposed.

Actually, there’s so much crap advice being uncovered it’s hard to know where to begin. I’ll start with the five biggest types of scammers exposed so far, explained using dogs.

The Poodle

The poodle likes to be Best in Show. It’s all about appearance, after all. You can spot a financial planning poodle by the big ego, the big hair and the BMW. Oh, and they like to be seen on television. Yes Sam Henderson, I’m talking about you.

Poodles don’t necessarily need the right qualifications. I mean, Sam Henderson lied about his, and nobody bothered to check. He says he also didn’t bother to check the work of his paraplanner, which would have left a client $500,000 out of pocket.

Never let a poodle near your money.

The Kelpie

Kelpies are excellent at one thing – rounding up lots of sheep and herding them into a paddock. 

It’s the same with the financial planning kelpie. Doesn’t matter what your needs are, you’ll end up in the same investment paddock as all the other clients. If you’re seeing an accountant, then you’ll end up with an SMSF. An AMP kelpie, you’ll end up in an AMP platform.  People rarely question this. Baaaa.

Never let a kelpie near your money. Are you seeing a theme here?

The Boxer

Anybody ever owned a boxer? Lovely dogs. Dumb as a box of hammers though.

Boxers can be the most dangerous financial planners of all because they’re more likely to cock things up through good old-fashioned incompetence. If it’s your money we’re talking about, that’s bad.

I once knew a boxer who was trying to get Certified Financial Planner certification (more on the Financial Planning Association in a moment). He failed the exam six times in a row. I think they gave it to him on the seventh try out of pity.

The point I’m making is that a lot of boxers arrive in financial planning through sales – cars, insurance, phone plans, whatever.  That’s not necessarily the background you want when you’re trusting somebody with all your cash.

 The Labrador

Everybody loves labradors. Good natured, safe around kids and wouldn’t hurt a fly. Don’t trust them anyway.

That’s because labradors are only affectionate in the hope you’ll give them food. You're their meal ticket.

Your friendly local financial planner is probably a labrador. Chances are you get a Christmas card every year, a phone call around your birthday and bugger-all else. Meanwhile, he’s eating you out of house and home by charging you entry fees, exit fees, ongoing advice fees and platform fees. He’s getting fat and lazy on your money.

CBA and AMP are famous breeders of labradors.

The Jack Russell Terrier

Sneaky little buggers, Jack Russells. They can steal something from under your nose without you noticing it.

Jack Russell financial planners make the news regularly. They are the thieves, the fraudsters and the outright conmen (not many women financial planners rip clients off). Fortunately, they’re far outnumbered by the other breeds.

Who let the dogs out?

Some financial planners have suggested I shouldn’t judge the industry by the actions of a few bad eggs.

So who is to blame for misdeeds uncovered by Rowena Orr QC?  The banks? AMP?  The  Financial Planning Association? ASIC?

I’d go further. I’d say everyone in the entire financial planning industry has to share the blame.

I’m including myself in that –  I’m embarrassed by this mess and ashamed I didn’t do more to put a halt to it.  I should have done more to expose the rorts and unethical practices. So should anybody who claims to be a professional adviser.

The good news? There will be a big cleanout. AMP is stuffed, the banks won’t be offering dodgy financial advice soon, and the Financial Planning Association (which has opposed every reform for decades) will be gone.

The Naked Takeaway

I’ll be writing a lot more about this and want to hear your story. If you’ve been bitten by one of the dogs mentioned, please email or do the social media message thingy.

If you’re an aggrieved financial planner, then toughen up. You’ve got a rocky road ahead of you. If you seriously think your advice proposition will stand up to scrutiny, then shoot me your details. Eventually, I plan to  publish a list of Naked Approved financial planners. If you pass my vet test, you could be on it.

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