A former financial adviser is launching a website to compare adviser performance.

Miles Hayward-Ryan told media that a good adviser might earn clients tens of thousands of dollars more than a poorly performing one but there was no way for clients to find out.

Adviser Peter Cave said it was a very short-sighted idea. He said advisers needed to be careful not to get caught up in short-term numbers. Advisers could get hung up on trying to make six-month or 12-month returns look good and justify fees, he said, which would disadvantage clients who had a long-term perspective.

“There’s too much focus on the value an adviser adds. What other industry group do you have to prove your value in? I bought a dishwasher at the weekend – I didn’t debate with the adviser there and say ‘how much do you get paid, how do you represent value’?”

He said the industry needed to stop knocking advisers and think about the long-term advice they gave a client.

Murray Weatherston said the website might work if every adviser only had one model portfolio. “But once you have to take individual investors situations into account, it becomes a load of rubbish.”

IFA chief executive Nigel Tate agreed it could do more harm than good. He said he had seen similar attempts in the past and each had failed because there is no way of accurately comparing rates of return.

“Each client will have several variables that would or could affect the performance of their respective portfolio, their risk tolerance and capacity, their cash flows in and out of their portfolio as well as the underlying fund performance.  Attempting to pull all of these into a single measure is a flawed way of measuring how an individual adviser is performing for his/her client, one client could have a lower performing portfolio simply due to the fact that their ability to meet their objectives is clearer and more easily achieved therefore the primary focus would or could be on risk reduction rather than rate of return.”

He said the IFA would not promote anything that suggested people could look at quantitative data, ignore the support around it, and come up with anything of value in the marketplace.