Referral relationships still troubled
Despite calls for financial advisers to be more aligned with other related services providers such as mortgage brokers and accountants, referral relationships will not be assisted by regulatory changes, according to Wealth Within co-founder Dale Gillham.
The problem is advisers, accountants and brokers each want to 'own' the client, and often the feedback following a referral is that the client isn't being looked after by the new provider, he said.
Because accountants are paid on a fee-for-service basis and many advisers still earn trails or other commissions, this can also make an accountant reluctant to refer a client.
However, with accountants more able to give what amounts to limited financial advice under upcoming regulatory changes, advisers may feel that accountants are encroaching on their territory, Gillham said. Accountants are tax specialists, but are not trained to pick stocks or build share portfolios, he added.
However, an accountant still needed to examine a client's risks and refer them to a specialist if they find the client is underinsured, Gillham said.
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