St George lambasted over IGP timing

Some financial advisers are up in arms at news that St George Bank is withdrawing the Advance Management Instalment Gearing Product (IGP).

The bank plans to phase out the current IGP loans by the end of August. It will introduce a new lump sum margin lending product, but those looking for an instalment type product will have to re-finance elsewhere.

Some financial advisers are up in arms at news that St George Bank is withdrawing the Advance Management Instalment Gearing Product (IGP).

The bank plans to phase out the current IGP loans by the end of August. It will introduce a new lump sum margin lending product, but those looking for an instalment type product will have to re-finance elsewhere.

The move was widely discussed behind the scenes at the recent CFP conference where a number of advisers expressed their anger over the changes.

Several believe the announcement was badly handled with a circular being faxed to advisers the day before the Easter weekend, just as many were leaving for their holidays.

"Four months is a tall order," says Jim Simons, a financial planner with the Excellence Group in Queensland.

"Its a huge amount of work for advisers in a short space of time and especially in the lead up to June 30, a period when they are most busy and generate the most income."

"Some of our customers are overseas for the next 12 months and its embarrassing to tell them that they have to take their business else-where," says another adviser who did not wish to be named.

"A lot of advisers borrow a lump sum, as well as on a regular basis, and would prefer to have these at one group so as not to confuse their clients," he adds.

However, St George's chief general manager, residential and consumer lending, Bill Ott, believes his group has been extremely thorough in its communication with the financial planning community and in put-ting together a comprehensive program, with instructions and time frames, for the product's withdrawal.

"We did expect some complaints, but the vast majority of financial planners supported us and continue to support us. They understand why we are doing this," he says.

"We are taking a new strategic direction in our business and we have a better product on the shelf. We are also rationalising our product range."

Ott says St George started talking to various dealers at the end of March and after consultation with them, decided that a fax was the best way to communicate the changes.