Confusion on planner independence
The label 'independent financial planner' is little understood by consumers, and new research suggests planners themselves are often guilty of compromising notions of independence.
That is one of the bottom lines of the latest Roy Morgan Superannuation and Wealth Management data, which has revealed consumer confusion about the independent status of financial advisers - particularly those employed by the major banks and their dealer group offshoots.
The research pointed to confusion being greatest where the branding of bank-related dealer groups was different than the branding of the banks themselves. The research found that 50 per cent of customers believed AMP's Hillross brand was independent, while 62 per cent of the Financial Wisdom customers believed it was independent of the Commonwealth Bank.
It said a similar story existed with respect to National Australia Bank's Garvan and Godfrey Pembroke.
The Roy Morgan research noted that even when the brand of the planner was the same as the owner, for example AMP and AXA, 29 per cent and 33 per cent of clients respectively thought their planner was independent.
The research also suggested that the planning groups themselves were compromising notions of independence. It pointed out that the big six financial planner groups were still placing on average 73 per cent of their clients' superannuation products with their own company - a figure which had shown no real change over the past three years.
It said planners directing the highest volume of super products to their own company were AMP (82 per cent), AXA (75 per cent), Commonwealth (74 per cent) and Westpac/BT (73 per cent).
The research also noted that despite the fact that 24.2 per cent of people switching their superannuation obtained advice from financial planners or accountants, only 7 per cent of those switchers were being directed towards industry funds.
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