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Task Force Targets Confidence Tricksters

Media Release
For Immediate Release
7 July 2005

Task Force Targets Confidence Tricksters

Leading economist Dr Gareth Morgan has applauded the Task Force on Financial Intermediaries on its proposal to restrict those who can call themselves a “financial adviser”.

“The Task Force is to be congratulated on having the honesty and guts to confront the investment industry over the corruption of the financial advisory business,” said Dr Morgan.

“Yesterday’s announcement that many product pushers opposed the restriction of designated occupations like “financial adviser” was no surprise and shows the industry is doing all it can to water down the Task Force proposals.”

Dr Morgan has previously published studies showing financial service companies often pay commissions to salesmen who then go out and dupe the investing public by describing themselves as independent "financial advisers".

“Many financial advisers are nothing of the kind and deliberately mislead people into believing that they are acting in their best interest. This is a scandalous state of affairs that the funds management industry has underwritten for decades.”

“The Taskforce has done the investing public a service by highlighting this confidence trick by the insurance industry. The government would do well to heed its recommendation and ensure that financial advisers can only receive their remuneration directly from the investing public who hire them for advice”.

The task force is due to make its final report to the Minister of Commerce in the next few weeks.

Ends

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