Choose - adviser or salesman?
Financial advisers working within practices aligned to major financial institutions need to question their status and whether they are an adviser or, ultimately, part of a sales force for an institution, according to the chief executive of Brisbane-based Goodman Private Wealth Advisers, Brad Church.
He said he believed that financial planners could answer the question for themselves by taking the high road by avoiding being aligned to financial product institutions.
Noting the number of financial planning groups acquired by institutions with the most recent being the SFG acquisition by IOOF Holdings, Church also noted a 2009 submission by the Australian Securities and Investments Commission (ASIC) which had mentioned the "dual role played by a financial adviser in providing advice services to clients and selling products for product manufacturers".
"It's time to take a stand," Church said. "ASIC raised their concern about product owned advisers back in 2009 and since then the financial services industry has continued to consolidate. This may be a profitable decision for those owners who sell-out, but as ASIC has highlighted, it affects the quality of advice being provided to consumers".
"Advisers who work directly or indirectly for a financial product institution are part of that institution's distribution network," Church said. "It is inevitable that at some point those advisers will recommend a financial product that belongs to their parent institution. At that point you have to ask the question, whose side is the adviser on? Are they adviser to the client or salesperson for the institution?"
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