ANZ Financial Planning (ANZFP) is moving universally onto a fee-for-service remuneration model for its advisers, becoming the first major Australian dealer group to do so officially.
ANZFP is to roll out the fee-for-service remuneration model to all of its 330 planners during its current financial year, which runs from October 1 to September 30, 2006.
Currently, 60 of its planners are on the fee-for-service model, which was initially rolled out on a trial basis in October 2003 to 10 per cent of the group’s advisers.
A further 10 per cent of its advisers moved over to the model in February 2004, at which time ANZFP announced it intended to roll out the model to all its advisers “within two to three years”.
ANZFP general manager Mike Goodall described the fee-for-service model as comprising both an upfront fee and an ongoing fee for ongoing services.
Take-up of the model is optional for ANZFP planners, although Goodall said he would monitor the market to assess the viability of a mandatory model over time.
He anticipates, however, that the majority of the group’s advisers will have taken the model onboard in the entirety of its provision within two years.
“We have been deliberately conservative in the roll out, because of the fact that it requires a complete change of mindset for many advisers to go from a commission-based model to a fee-based model.
“The most difficult part of the roll out was actually in the minds of some advisers about what value they bring to justify the fee they are intending to charge.
“However, we investigated the ANZ fee-for-service model in New Zealand late last year, and their observation to us was consumers quite readily embrace a fee-for-advice model when you present a straight value.”
Meanwhile, Goodall has rejected industry speculation that “a flock of disaffected Westpac advisers have migrated over to ANZFP”.
He acknowledged employing “probably no more than about half a dozen Westpac advisers over the past 12 months, all of whom had approached ANZFP”.
“I’m aware of a number of dealer groups which, like us, have been approached by Westpac advisers clearly as a result of a number of recent changes at Westpac.”
