by Jenha White
Chair of the Taskforce Rob Cameron says some of the areas it wants the financial adviser industry to give input on include improving and standardising periodic statements to managed fund investors, so that asset holdings and performance are clear and comparable.
"Here's an opportunity for the industry to step up and provide ways to make a comparative basis.
"We understand how difficult measuring performance can be depending on the objective of an investor and we think no-one is better equipped to help develop those measures than the industry itself."
He says the Taskforce expects the financial adviser industry to work closely with policy officials or to make an arrangement themselves to help investors better measure performance and returns.
Another area the Taskforce wants industry input on is including a warning label on disclosure documents where products are particularly risky or complex to encourage investors to exercise caution and seek independent advice.
Institite of Financial Advisers (IFA) president Lyn McMorran says the theory's good but questions how it would work in practice.
"Who decides how risky an investment is and how is that monitored? There is a potential for loopholes and what this means needs to be clearer."
Society of independent Financial Advisers (SiFA) president Murray Weatherston says complex issues are complex and it's almost oxymoronic to talk about plain English when you have to go into detail to cover off the issues of risk.
"The idea is cute, but highly impractical - one man's meat is another man's poison."
Cameron acknowledges that this recommendation is not simple and will require a lot of work and thought.
"No-one's better equipped than the industry to get involved and lead this discussion," he says.
There is also the recommendation to restrict the use of the words "independent adviser" and to impose a clear fiduciary duty on those that use this title.
Investment Savings & Insurance Association (ISI) chief executive Vance Arkinstall says for years now, there have been views and concerns over independent advisers and the reality is that there are very few who can truly claim they are independent and who can offer the full range of investment services available.
He believes there does need to be closer attention paid to the way advisers use the word independent so it doesn't mislead investors or cause the investor to have a greater degree of confidence than they should have.
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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