Group heads call for a fair ‘compare’

dealer group advice industry funds insurance financial advice money management

17 October 2008
| By Mike Taylor |

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.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 3 weeks ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 3 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 3 weeks ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

1 week 2 days ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

4 weeks 1 day ago

The Reserve Bank of Australia's latest interest rate announcement has left punters disheartened on Melbourne Cup Day....

1 week ago