Banks should go back to banking

Banks should step away from the provision of wealth management services and independent, best interest financial advice because of the entrenched product-driven sales culture, according to the director of an advisory firm.

Certainty Advice Group director, Jim Stackpool said banks would essentially maintain a sales and product-based culture, which he said would be justified if banks returned to just producing and providing world class, robust, well-tested products.

“Don’t confuse the clients if you want to save your brand by continuing to push this line that ‘we’re acting in the clients’ best interests’ [when] the ads on TV have all these offerings,” he said.

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“It’s fundamentally about ‘buy our products’.”

Stackpool likened it to hospitals in NSW being owned by pharmaceutical companies, and said that was the problem in financial services where all services offerings were owned by product providers.

Stackpool noted that while banks previously had a trusted bank manager 30 or 40 years ago that customers sought advice from, the 1980s and 1990s witnessed a change in banking culture that forced client-centric managers out, as banks looked to broaden their suite of offerings from just a loans market.

This included the likes of Westpac buying BT, National Australia Bank (NAB) buying MLC, and ANZ buying ING Australia and renaming it OnePath.

“It was about wallet share. There’s a pot of gold here for us to sell these guys more products,” he said, noting that ANZ was now seeking to sell its wealth division, while NAB has held similar discussions.

“The walls around the current institutions are so strong that anyone trying to get outside that to get through advice that’s not aligned to someone on a sales-based or a culture around remuneration based on products, they don’t know where to go.

“There’s still only 20 per cent of Australians that seek advice or think they can afford advice primarily because we’re populated by these organisations whose fundamental culture is built on selling products as compared to giving advice.”

Stackpool also added that the product-driven sales remuneration culture was so entrenched in banks that no reviews, reports, or even a Royal Commission would shift this culture.

Instead change would have to occur through the emergence of a completely different approach, where those in the industry were a true equivalent to a medical practitioner who was not remunerated by a product but simply provided best interest advice.

“And we haven’t got that profession out there yet,” Stackpool said.

 




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Comments

Comments

Aha, so by that logic Jim, no consumer has ever benefited from seeing a bank planner, or investing/insuring through bank products? This is a load of trollop. I'm an unaligned IFA but even I can see the fallacy in your argument.

Our profession would face even larger issues if we didn't have major institutions with vested interests in this area, and let's face it, not every client would be able to get serviced by IFA's if the banks and other majors left this space.

Get real, this sounds like a bit of media trolloping to get your name in front of planners so you can push your own profit driven approach.

Its easy to throw stones at eachother Joe, but you and me both realise we need to stick together for the good of the profession. There are great bank planners out there, this tripe just serves to divide and destroy. This is why we cant get good representation as a industry, too busy throwing sticks at eachother., I am sure the banks dividends have served Jim well over the years,and probably still are, I hate those that seek to get ahead by turning on others, its a lazy way of doing business.

This idea that selling is bad is wrong. Everybody is selling something. Every doctor and consultant and even ASIC employee is selling their time and knowledge. Convincing their boss/customer that they should be paid $100 per hour or more because of the valuable work they do. If they don't sell their value, they get to lose their job. So please lets stop this nonsense that all selling is bad news, unless we believe we are also bad news.

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