Ray White family-owned entrant hits out at “conflicted” industry
A company owned by the family of real estate juggernaut, Ray White, says it will be one of the few non-conflicted players in a planning space haunted by legacy issues, like grandfathering and product-pushing.
Wealth Market has applied for an Australian Financial Services Licence (AFSL) and hopes to be operating by Christmas.
Despite having family members who have a stake in both Ray White and Loan Market, Ray White has stressed it is not affiliated with Wealth Market in a directorial sense and Wealth Market does not have a direct property option.
In response to concerns raised by industry veterans about a conflict in a real estate-industry funded business moving into the planning arena, Loan Market chairman and Ray White deputy executive director, Sam White, said the conflicts lie within the existing framework.
"We're one of the few dealer groups that won't be owned by a product manufacturer and we can't get paid commissions from product manufacturers," he said.
"We won't have any grandfathering issues. There's no conflict of ownership around a manufacturer and a distributor, so I think we can be one of the few groups that can be clear around what we stand for," he said.
White said the business considered purchasing an existing business, but rejected the idea because they did not want to inherit legacy issues.
He also rejected a conflict of interest between real estate and brokerage activities and planning, saying the businesses will be clearly delineated despite sharing shareholders and directors.
Wealth Market will be wholly-owned by Loan Market.
"I understand that there's scepticism and I get that, but it's frustrating because everything that we want to do is exactly in line with these changes that (the industry) is making."
Last month, Ian Knox, managing director of Paragem, said the firm's move could expose tensions between the real estate and financial advice markets' divergent objectives.
His comments related to an ad on LinkedIn for a Wealth Market financial planner, surrounded by Ray White branding. It called for someone with a strong sales background and offered "unlimited bonuses". White said the ad was for an internal financial planner — as the business does not yet have an AFSL — and said the bonuses would be based on customer-ratings.
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