Consumers need an effective method to select advisers. UNFETTERED markets are the most effective and efficient way to allocate scarce resources, including capital, in a world of unlimited wants. In order for markets to operate properly, they must be fair. All too often, though, one transacting party, usually the seller, conceals knowledge that can give them an undue advantage. This is a problem economists refer to as information asymmetry, which governments seek to offset through regulation there are laws, for example, aimed at ensuring truthful advertising and preventing fraud and conflicts of interest.That is all well and good - a key role of governments is to engineer a level playing field. But it is clearly insufficient in the case of one of the largest markets - that associated with the investment of Australians' hard-earned retirement savings. Superannuation funds hold about $1.35 trillion. Beyond that, the managed funds industry controls about $1.89 trillion. There are slightly more than 18,000 financial advisers in Australia - some are in the superannuation sector, which manages the compulsory contributions from workers and their employers, while others are in the managed funds industry, which controls people's discretionary investments. The declaration of commissions is legally compelled, and more than eight in 10 of those 18,000 advisers are associated with product suppliers, either through working within a dealer group, or by being directly employed as an authorised representative under a firm's Australian Financial Service Licence.So, Australians can be relatively confident their investment advisers are not hiding conflicts of interest. However, this industry is arguably failing a far more important test of transparency: it is virtually impossible to know just how good an investment adviser really is. Ask yourself how you would go about finding an adviser. The answer is that the search relies largely on word of mouth and reputation. Yet, in the field, reputation is unable to be tested in any meaningful way.One of Australia's leading economists, Dr Nicholas Gruen, a former member of the Productivity Commission and the Business Council of Australia who now heads a consultancy that provides advice to private companies and governments, has a simple and powerful solution to this profound problem. Consumers would be able to make informed choices were they able to compare, in a standardised way, the financial advisers' performance.The key to Dr Gruen's solution is that the information be standardised advisers would publish a sample portfolio that would reflect their selection within and across the range of investment securities - shares, bonds, commodities, derivatives, real estate and cash. It would be simple and low-cost. All it would require would be a website on which the portfolios would be published. That site could be set up by the federal government, the Australian Stock Exchange or one of the financial services industry associations. The advisers would not even have to reveal the actual contents of the sample portfolios, because consumers would be able to be confident that the portfolios were following the same rules.At the moment, investors have to make a leap of faith they have to take the advisers' word about past performance, and that information has little integrity because it is entirely selective. An attractive element of the proposition is that it would not require government intervention. The best advisers would, or should, be pleased to be able to show their worth, while the underperformers might decline to be involved. That in itself would tell consumers much. Poor performers would have a strong incentive to improve their management of people's money, something for which they charge large amounts. The Age therefore requests that such a site be established, and we challenge the financial advice industry to then participate. The public is owed true transparency and fair markets.