Product push disguised as education
Educational programs launched by some vertically integrated dealer groups are nothing more than a product push to advisers, says Pinnacle Practice founder, Anne Fuchs.
Fuchs, who is in the business of matching practices with appropriate dealer groups, said most well resourced groups have started to seriously focus on education and professionalism by way of launching initiatives such as business schools and elite programs for advisers.
However, there are two distinct drivers behind this trend depending on the dealer group's ownership structure.
"You've got the vertically integrated ones that are building these elite programs so that their product manufacturer profits; that's the end driver," Fuchs said.
"At the same time, the independently owned ones are doing it with the value or ideology behind it."
With the Future of Financial Advice (FOFA) reforms now in place and the regulator's increased focus on ethics in the dealer group sector, Fuchs said these groups were finding clever ways to help increase product sales through advisers.
"They're smart enough to know that blatantly pushing the product is not going to win or get the result they want," she said.
"So they package it in the guise of elite programs and out of that they are hoping to get a boost in product sales."
Fuchs warned dealer group heads initiatives like these could ultimately backfire, as advisers will not be forgiving after grandfathering comes off in the next six months.
"The sincerity of advisers around best interest is so overwhelming," she said.
"I caution the so-called professional elite programs and business schools to be sincere; if the end driver is to sell a product it is not sustainable and advisers will leave."
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