The wealth management strategy recently announced by AMP is a return to the dark ages, according to Synchron’s chair, Michael Harrison.
Harrison believed the AMP announcements were very bad news as the new strategy would again represent a situation where institutions create products and force people into them.
He stressed that the core of the problems across the wealth management industry lay with banks and institutions while the sanctions introduced only caused a growing burden of obligations for advisers.
"To make matters worse, governments, and institutions with big budgets, appear to have also somehow manipulated the rhetoric to such an extent that many people seem to genuinely believe advisers have brought the current set of circumstances on themselves and have no empathy for them,” he added.
"What many people have failed to understand is that AMP and the institutions were largely responsible for the fees-for-no-service debacle, not advisers.”
Harrisson said that although AMP did not indicate how many advisers would be forced to exit the industry, following the rationalisation of its network, the estimates ranged from 30 to 80 per cent of adviser network.
According to Synchron, the Government mismanaged the financial services industry to such an extent that it has effectively handed institutions like AMP a free pass.
"The fundamental question governments and institutions need to ask themselves now is, how are consumers better off without advice?.”