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29 Jun 2017

People still seem to be getting the wrong advice


2 min

‘Untrustworthy’, adjective: not able to be relied on as honest or truthful.

At Worrells we regrettably experience debtors and directors coming to us, after previously seeing an unregulated advisor, only to hear them say they wish they seen us in the first place.

Why is so much confusion still out there? I suppose it’s because everyone has their own opinion about what right advice is, and who should be giving it.

To assist in removing this confusion the Australian Financial Security Authority (AFSA), as part of its program of video releases on personal insolvency matters, has produced a video titled Bankruptcy Advice: Untrustworthy Advisors. In her final ARITA magazine piece, the then Chief Executive and Inspector-General in Bankruptcy, Veronique Ingram, said “AFSA is producing a short video to warn people of unregulated, unlicensed advisors who may target vulnerable people in time of financial crisis and pressure”. The video gives examples of untrustworthy advisors who may ask for a $20,000 payment for people to be able to get out of bankruptcy “as fast as six months” or that bankruptcy “will not affect your credit rating”. Both examples are illegitimate and potentially damaging to people’s wellbeing and financial future. And unfortunately, there are many more examples of damaging advice out there.

Personally, I liken it to the unlicensed builder, the unlicensed doctor. Surely people know better than to act on advice that potentially makes matters worse: living in an inhabitable, unsaleable home or suffering in poor health.

While the initiatives of organisations such as AFSA and the Australian Securities and Investments Commission (ASIC) to encourage debtors and directors to only get professional advice should be applauded, I think that responsibility extends to us all, as professional advisors. At the end of the day, whether solvent or not, professionals undoubtedly have their clients’ best interests at heart, and that includes seeing them get proper and regulated advice, whether that be from Worrells or another regulated insolvency firm.

Insolvency is a stressful and worrying time for many individuals and business owners. Our job as regulated advisors is not to make that situation worse.

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