Group heads call for a fair ‘compare’
Financial services product manufacturers might have the ability to rebalance the industry fund’s ‘compare the pair’ advertising campaign if they provided data on the benefits that actually flow to clients from receiving financial advice, according to a round table of financial planning dealer group heads conducted by Money Management.
Asked to comment on the effectiveness of the Industry Funds’ campaign, the three dealer group heads — Count’s Marianne Perkovic, Financial Wisdom’s Tim Browne and Financial Services Partners’ Geoff Rimmer — argued that it had resulted in the debate becoming heavily one sided.
However, it was Browne who argued that product manufacturers could play a role in rebalancing the debate and underlining the value of advice.
“I think that the manufacturers, insurers and platform providers can play a hand in balancing the debate with the data that lies in their databases,” he said.
“For example, as an insurer, I’d be fascinated to see out of the last 1,000 claims that they’ve paid how many also saw the consumer receive a payout from an industry fund, and what the sum insured from that industry fund was compared to the sum insured paid through a retail insurer.
“I think you’d find that those clients who have retail insurance in place would have higher sums insured and would have better estate plans in place as a consequence of it,” Browne said. “I really would like to see the manufacturers feeding into this debate some information about an advised client versus a non-advised client, so we can see there are better structures and better plans in place.”
Browne’s contention was backed by Rimmer, who said comparisons should be based on advice rather than price.
“‘Compare the pair’ based on advice rather than price is really something that Australia needs,” Rimmer said. “Clients who are discouraged from getting advice can’t be getting a good outcome. And whether that was intended or not, that is what has happened.”
Perkovic said she believed it was unfortunate the debate had been heavily swayed to one side.
“But as an industry, we just need to focus on what the fundamentals are and what the value of each of our groups are,” she said. “There’s so much demand for advice and it would be great to see the industry funds value advice and not criticise it.
“They have got the clients who really need advice, who need to be given advice just because of the nature of their employment and where they’ve come from. So it would be great to see a shift from them to focus on advice for all Australians, regardless of what structure or product you choose,” Perkovic said.
AUTHOR
Mike Taylor
Recommended for you
ASIC has issued infringement notices to two AFSLs over financial advisers providing personal advice while they were unregistered.
Australian retirees could increase their projected annual incomes by as much as 51 per cent through comprehensive financial advice, according to a Vanguard study, but cost continues to be an issue.
AMP has announced a senior appointment to its North leadership team, reinforcing the firm’s commitment to the advice industry.
Despite the financial adviser exam being rooted in ethics, two professional year advisers believe the lack of support and transparency from the regulator around the exam is unethical.
