Things are heating up in DDO land. This week, I look at why adviser attestations are great for distributor compliance but not so much for issuers…
PS: We met with ASIC yesterday and while they will never endorse any particular solution, they were very enthusiastic about our approach. Yay!
Doctors and drugs
So here’s the thing. If you ask someone if they are doing the right thing, they are going to say yes. Either because they truly believe they are, or because they are a crook and trying to pull a swifty. Either way, you don’t know any more than you did before you asked them.
I always find an analogy to be helpful. In this case, doctors and drug companies. As it happens, doctors are required to advise drug companies if a patient has an unexpected reaction (the same way financial advisers are required to advise the issuer if there’s a complaint).
But drug companies do NOT entirely rely on doctors when it comes to the efficacy of their products. They run clinical trials, they keep their own data, they make their own investigations.
I’m willing to bet that if you ask doctors if they are prescribing the right drugs for their patients, they are going to say yes. Most doctors, like most financial advisers, are simply trying to do the right thing, look after their patients and keep their noses clean.
So it seems to me, that relying on advisers attesting that clients are inside the target market falls into the same bucket. It’s not a question of ethics or ‘all advisers are crooks’, it’s simply the fact that self-reporting never gives a clear picture of what’s really going on. Even more so when you’re asking the group of people who are distributing the product, not the end-users.
So what is the solution?
Wattletree of course (but you knew I was going to say that!). By understanding a real customer base and matching that against a TMD, you can go a long way to demonstrating reasonable steps. Without a single adviser attestation…
If there’s a burning DDO question that no-one seems to have a good answer to, or you just need to understand how Wattletree works in more detail, please get in touch. I invite you to shoot through your Q’s using the below form or alternatively you can call me on 0417 970 818. There’s no such thing as a silly question*
*OK, we all know that’s rubbish but you know what I mean!