Technical quality slides in the wake of staff cuts
Some dealer groups and advice firms claim there has been a sharp decline in the quality of technical advice by product providers in the wake of staff cuts, even to the point of exposing them to legal action by clients.
They suggest significant staff cuts have occurred in technical departments, particularly of senior staff members, as a result of cost-cutting exercises implemented recently by the major fund and platform providers.
Dennis Bashford, managing director of Brisbane-based dealer group Futuro Financial Services, which has 45 member practices, said the cuts have “made it difficult to get any technical information as well as information that’s accurate”.
“We’ve recently received technical information from some platforms that was plain wrong and exposed the group to potential legal risk from clients.
“In some instances we’ve received valuations on products and then acted on that advice on behalf of a client, which has then turned out not to be appropriate because the valuations were wrong.”
Growth Plus Financial Group managing director Ben Jayaweera said staff cuts had resulted in business development managers (BDMs) from product providers recently “falling to the level of brochure delivery persons”.
“Some BDMs have absolutely no idea of the products/strategies they are representing and, therefore, are incapable of being accountable for the delivery package.
“We expect, but it’s no longer always the case, that they should know what’s in the Product Disclosure Statement, where to find it and also some risk factors, advantages/disadvantages, etcetera.”
Louise Biti, managing director of boutique financial planning provider Strategy Steps, said most platform or fund providers are downsizing their technical teams “as a cost centre”.
“These cuts are leaving less people to service advisers and, since the cuts are targeted at more senior people, less senior people to provide the services.”
The cuts are also resulting in the providers directing adviser queries through to a call centre rather than a technical centre, she added.
“The quality of information from a call centre will be highly variable and not specific,” Biti said.
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