The Government's promise to deliver an enhanced public register of financial planners including any linkages they may have to major banks has the potential to adversely impact public perceptions of bank-aligned groups, according to new data released by Roy Morgan Research.
The research, released to Money Management, has confirmed that many financial planning clients continue not to understand that groups such as Financial Wisdom, Godfrey Pembroke, Garvan and Hillross are actually linked to the major banks or AMP Limited.
The Roy Morgan research series picked up this lack of knowledge about the actual ownership of the planning groups more than five years' go, but the research company's Industry Communications director, Norman Morris said the issue continued to exist despite the significant levels of publicity around issues such as the Commonwealth Financial Planning enforceable undertaking.
"Our latest research shows that considerable confusion remains among the users of financial planners regarding the extent to which the planner is perceived to be independent," he said.
"The main area of confusion regarding the independence of financial planners occurs when the
planner is branded differently to the major fund manager that owns the planning group," Morris said. "For example, 55 per cent of the clients using Financial Wisdom (owned by the Commonwealth Bank) consider it to be independent, which is well ahead of the 14 per cent who consider Commonwealth Bank branded planners to be independent."
The Roy Morgan analysis said that planners belonging to all the major banks and labelled as such were generally understood by consumers to be ‘tied' rather than ‘independent' with only 11 per cent of Westpac financial planners' customers considering them to be independent, compared to 12 per cent for NAB, 13 per cent for the ANZ and 14 per cent for the Commonwealth Bank.
"On the other hand, three of the major banks' own financial planning groups are largely perceived as independent by their clients. These include Godfrey Pembroke owned by NAB (considered by 50 per cent of clients to be independent); RetireInvest owned by ANZ (37 per cent considering it to be independent) and Count Financial (42 per cent considered independent) owned by CBA. AMP Group own Charter (48 per cent considered independent) and Hillross (44 per cent considered independent)."
The Roy Morgan Research findings have come as a number of mid-size dealer groups unaligned to the major banks have reported an upturn in inquiries from clients previously serviced by the major banks.
