Ray White's move into financial advice has sparked concerns that real estate's commission-heavy structure could be at odds with the planning arena's aspired professional standards.
The real estate heavyweight has begun its push into financial advice via the launch of Wealth Market, dubbed "a newly formed Financial Planning dealership that aims to change the way financial advice is perceived by everyday Australians".
The Sydney-based new dealer group was in the process of recruiting for an experienced financial planner last week.
Industry veteran Ian Knox, managing director of Paragem, said the move could expose tensions between the real estate and financial advice markets' increasingly divergent objectives and strategies.
"The planning community has jettisoned commissions and the real estate industry embraces commissions, so one of them is not going to work very well," Knox said.
He also raised concerns about the differing licensing structures.
"The great challenge is the real estate industry comes from a different licensing regime where you get a licence when you start selling, as opposed to the planning industry… where the skill set is moving away from pure product into a fairly articulate assessment of somebody's personal circumstances.
"I struggle to imagine somebody going in to buy a house sitting down and disclosing their personal financial affairs with that entity."
The play could also create potential problems if advisers are weaving between property advice and financial advice, Premium Wealth Management CEO, Paul Harding-Davis, said.
"It will create some interesting tensions for them in terms of how they structure the advice in that the planner can advise on the asset class, but can't recommend specific propertiesr," he said.
"It is an absolutely sensible strategy for them, it's completely unsurprising and I hope they do it really well, to a really high standard.
Money Management has sought comment from Wealth Market.
