Will this new system shine a light on the naughty and nice?

Alex Burke,  Senior Writer,  No More Practice Education

A new ratings model for advisers and licensees aims to deliver greater transparency and restore trust in the industry – but what does it entail and how will it make use of your data?

Adviser Ratings, working with University of New South Wales Professor of Finance Jerry Parwada, is submitting a new ratings system for industry consideration. It focuses on the idea that there are factors in the way licensees operate that can predict the likelihood of adviser misconduct.

As Parwada puts it, "The focal point of our methodology is to predict actions within a licensee that are detrimental to client’s interests.”

Adviser Ratings wealth chief executive Mark Hoven adds that the "destruction of trust in the financial advice industry" necessitates an "evidence-based, scientifically validated service" for consumers to access. But how would it work, and what does it mean for the industry as a whole?

A two-pronged process

The proposed ratings system has two

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