Financial Standard Comments - Big six use advisers for sales while clients confused on independence

Comment by Jamie ()

Jamie () — Thu, 14 Jul 2011 14:12:55 +1000

The majority of conflicts would disappear very quickly if the government and regulator bit the bullet and abolished dealer groups. Advisers should be licensed personally and standards enforced by their professional association (such as the FPA) - adopting the model of true professions (such as accountants and lawyers).
Product manufacturers should be allowed to make product, and advisers be free to provide truly independent advice. This industry will never evolve into a profession until these structural conflicts are removed.

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Comment by Jason M ()

Jason M () — Thu, 14 Jul 2011 15:10:38 +1000

Most financial planners are brainwashed by the parent entity. Whilst most planners have the best interest of their clients at heart and employ appropriate strategies the problem lies at the bif end of town, with the institution that sadly employ tactics that make the adviser salesforce feel their own hometeam product offering is superior. Most institutional owned dealer groups restict contact, communications, email, marketing from others in favour of their home brand. It is this very restriction that should be banned.
I don't think that is appropriate given that almost 75 cents in the dollar goes towards the institutions products that institiionally owned advice channells can be rebranded. They should be restricted to being called the parent institutions name.

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Comment by Gez ()

Gez () — Thu, 14 Jul 2011 16:50:40 +1000

They didn't need to do research to find this out....has been the way for decades. Banks sell their own stuff ...of course they do. Dealer groups get volume bonuses to sell certain stuff...that's business. Consumers aren't that stupid......"oh yes miss Westpac teller, could i please open an ANZ account?" There is no solution here.......either you are an independant consultant with own license or similar...or you work for advice based distribution team.

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Comment by Trevor ()

Trevor () — Thu, 14 Jul 2011 17:51:48 +1000

Advice per se does not deliver financial results.
It is the implementation of advice by use of appropriate and reliable financial products that do deliver the results.
Consequently, AFS Licensees, after going through a due diligence process restrict what their authorised representatives can deal in/offer to an approved product and services list which the AFS licensee considers appropriate and reliable.
To ignore the fact that ASIC eventually takes action against the financial product provider when everything goes pear shaped because it is only these billion dollar wealth managers/product providers who have the resources to make any sort of recompense,
Most of the client discontent comes about due to financial product failures caused by volatile imvestment performance, liquidity problems - freezing of switches/redemptions etc,.
Whilst in a minimum of situations the financial advice is negligent/deficient due to the failure in disclosing and quantifying the financial risk involved.
Financial Product Advisers, who are really small business operators do not have the financial resources to cover loss due to financial product failures.

Financial Standard Comments - Big six use advisers for sales while clients confused on independence

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