Advisers slam bank moves

By George Liondis

Despitethe actions of the banks in building larger distribution models and increasing their product range, independent financial advisers (IFA) remain disillusioned with the bank’s actions and feel they are in fact rallied against them in the advice market.

In his survey, Cameron, a director of Business Owner Research, found independent advisers remain reticent about engaging the big banks in the superannuation market after encountering clients that have been sold inappropriate products by banks, promulgating the view that banks are focused only on selling their own products.

The survey also highlighted that none of the big banks have been active in marketing to independent advisers, reinforcing the perception amongst IFAs that banks have a tied agency force that competes directly with them.

The survey, which concentrated on independent advisers and dealer groups which consult to the corporate superannuation sector, also found a high level of master trust usage amongst the clients of independent advisers.

In fact, 69 per cent of IFA’s surveyed indicated that most of their corporate superannuation clients are using master trusts, and all indicated that at least some used master trusts.

The survey found independent advisers favoured master trusts in the corporate superannuation sector for their administrative efficiency, wide choice and flexible fee structures.

“I think master trusts are seen as a good solution for the clients and therefore a good solution for advisers,” Cameron says.

“[Corporate] superannuation needs are often quite complex and master trusts can often meet those needs quite efficiently.”

But the research also revealed that the ability to deliver administrative efficiency was the key point of differentiation between master trust providers for independent advisers, suggesting that advisers are quick to ignore master trusts that fail to deliver in this area.

“To the advisers, master trusts are really about getting efficient and if the master trust is not efficient, then it undermines the reason for having a master trust in the first place,” Cameron says.

The survey also found that 44 per cent of independent advisers offer a wrap account service, with AMP, BT and Macquarie being the major wrap suppliers.