Stockspot hits out against Vanguard’s QoA Review submission
Stockspot’s founder and chief executive Chris Brycki has hit out against Vanguard’s submission to the Quality of Advice Review, flagging concerns with carving out a role for themselves as product issuers and product advisers.
Vanguard’s Quality of Advice Review submission recommended a ‘sliding scale’ regulatory approach spanning from unregulated information to lightly-regulated personalised guidance to limited advice through to comprehensive advice.
Brycki said: “From my reading it appears that Vanguard wants to lower the compliance framework. This will allow Vanguard to offer potentially conflicted advice in a vertically-integrated product offering.
“I have nothing against Vanguard. I love their products so much that we recommend some of their funds to Stockspot clients. However, we also recommend products from other issuers when we believe they are in our clients’ best interest.”
Brycki said this was reminiscent of vertical integration and conflicted advice; two of the issues that brought about the Hayne Royal Commission.
“This is something the financial industry as a whole has worked so hard to get away from and a reason why best interest duty, the safe harbour steps and Code of Ethics were introduced.
“What we don’t want to see is an environment where retail investors are ‘guided’ into a Vanguard product, by a Vanguard adviser, when there are better products out there.
“Financial advisers must remain independent from the product issuers. It makes no sense to now allow big corporations to become their own financial advisers. This undoes all the hard work of the banking Royal Commission.
“If Vanguard is worried about the cost of advice (as per their submission) then changing the rules as they have suggested does nothing for affordability. It just masks the true cost of receiving advice.
“Vertically-integrated advice allows product sales to masquerade as advice and make it impossible for consumers to determine whose interest their adviser is acting for. Again, this would further reduce trust in the industry.”
Recommended for you
The Financial Advice Association Australia has released its pre-budget submission, including six key items to help reduce the cost of professional advice and increase its accessibility.
Phil Anderson, general manager for financial advice at the FAAA, believes the CSLR levy could reach $100 million if Dixon Advisory complaints are allowed to continue.
Proposed legislative changes to safe harbour duty could result in advisers having reduced professional indemnity costs, a joint submission by seven major licensees said.
With 66 per cent of newly established advice licensees being sole advisers, what are the risks and legal ramifications to consider when taking the plunge into self-licensing?
Add new comment