Conroy fires broadside at Telstra deal with Advantedge
Opposition financial services spokesman Stephen Conroy has hit out at Telstra for channeling its redundant staff towards National Australia Bank subsidiary Advantedge for financial advice.
As reported inMoney Management(March 15), Telstra recently negotiated a deal with Advantedge for the provision of financial advice to its 15,000 redundant employees whose jobs will be shed by the telecommunications giant over the next 18 months.
Under the deal, Telstra employees made redundant were given a voucher worth $165, or the cost of one consultation, for the services of an Advantedge financial planner.
Senator Conroy however said that earlier redundancies from Telstra involved paying vouchers for the financial planners of their choice, but in this deal, employees were forced into using the NAB-owned Advantedge.
"For Telstra to be potentially receiving fees from the company that it is foisting on to its redundant employees in my view means Telstra are profiteering on the back of the very people that they're making redundant," Conroy says.
He says that the deal with Advantedge amounts to a commercial benefit for Telstra, and could expose Telstra to litigation for any flawed advice.
"Because Telstra has trapped the employee within a financial structure not of their choosing, they are opening themselves up to future legal redress," he said.
A Telstra media spokesman hit back at Conroy's remarks, saying it was Advantedge which was providing the vouchers for advice and staff were free to go to other advisers of their choice, albeit at their own cost.
He also says that the deal with Advantedge was part of a corporate benefits program which includes discounted home loans and cheap movie tickets.
"We are not saying to staff, 'you may only seek financial advice from one provider'," the spokesman says.
The spokesman says he is unaware of any commercial benefit to Telstra from the deal with Advantedge; nor does he believe Telstra has exposed itself to legal liability.
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
