Independent advice could cease to exist if planning laws continue to back institutions’ current charge of acquisitions, an adviser fears.
The expansion of institutional bodies, like banks, into the planning space has seen a much higher concentration of aligned advice firms and business models, often to the detriment of clients seeking an alternative, Neil Salkow, co-director of Roskow Independent Advisory in Brisbane, said.
“I think the big loser is the clients¨ If I were a client, I would not want to go to an independent adviser if I knew their end game was to sell out to institutions,” he said.
Roskow said while independent advisers have a commitment to the client, institutions have more complicated obligations.
“People should remember that the first responsibility of those institutions is to shareholders not to their clients,” he added.
“The status quo right now needs to be turned upside down and shaken up because it is not equal. Current financial planning laws favour the banks and institutions at the expense of mums and dads in the community.”
His comments follow the recent acquisition of the SFG advisory by IOOF, a deal worth $670 million.
Roskow said larger institutions “belong in the financial product manufacturing space” and not the advice space.
