Independence no guarantee of quality financial advice

amp financial planning financial advisers planners

31 August 2012
| By Staff |
image
image
expand image

People who want financial advice are looking for stability and security - which is exactly what bank-aligned planners can provide them with, according to Hunts' Group director Anthony Hunt.

It is a mistake to assume that independence is clients' primary consideration when choosing a planner, he said.

Instead, people are more concerned about trust, quality of advice and the backing of an institution, Hunt said.

"I think there's a view - not so much in the industry media but in the general media - that independence is sort of a guarantee of better quality planning," he said.

Boutique Financial Planning Principles Group president Claude Santucci agreed that independence was no guarantee of the quality of advice, but he objected to the assertion that people come to planners looking for "stability and security".

"They assume they're going to get stability [when they go to see a planner]. They assume they're not going to lose capital," he said.

Santucci doesn't object to planners having the backing of an institution and pushing their institution's products on their clients - but he wants them to be honest about it.

"If I was an adviser with Hillross I'd have a big AMP sign behind my desk on the wall. And I'd make the point that I have the institutional backing," he said.

Hunt conceded that if a consumer goes to a bank-aligned planner they have a much higher likelihood of ending up with one of that bank's products.

"I don't think that's any great surprise to anybody. You know what you're going to get. [But] that may be what you choose, and you may well value the brand and the stability of the organisation," Hunt said.

AMP director of financial planning Steve Helmich said the clients he talks to place a high value on advice that is backed by a strong institutional brand.

"We encourage planners to let their clients know that the advice they give while under the Hillross brand is backed by the AMP brand quality," he said.

Helmich said the strong branding and product research of institutions had allowed them to avoid many of the "blow-ups" in recent years.

"If you look at some of the failings in the industry over the last few years, they've mainly been in [the independent space].

"And that's because they've been exposed to products where there hasn't been good strong due diligence around product selection," he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

19 hours ago

Interesting. Would be good to know the details of the StrategyOne deal....

5 days ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 3 days 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....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

3 days 22 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

3 days 1 hour ago