It is time to out the banks?
As you may be aware I am often posting controversial topics in relation to outing the marketing and issues I have with lack of transparency around financial products. For the record, I also include the advice around purchasing property (off the plans with associated depreciation , positive geared houses for a fee, and housing developments with commissions attached) in this general umbrella of financial products, even though it is not formerly recognised as such. On this topic, I had another financial planner sit with me yesterday suggesting to me, to advise my clients to invest in property in a particular development. It’s is by co-incidence, that my brother lives in the suburb suggested and I know it well. Lets just say it is not the pick of the crop. Oh I forgot to mention, the Planner also gets a 3% commission on the sale. Taking tips of Planners can often be concerning.
But for now, Why is it that The top 50 Financial Planning groups are owned by the banks? When my Mother and Father drop into a bank for Financial advice are they being sold a product? Or are they being assessed on their merits? i.e. Why is it that all the banks buy Financial Planning firms, is it to sell their products such as Personal Insurances (Life , Income Protection, TPD and Trauma), Superannuation, and Managed funds? Lets look at the statistics and who you are visiting when you see a Financial Planner.
The following is listed as such RANK/ Company Name/ Amount of Advisers/ Real Owner
1-Professional Investment services-1551-Aviva (22) – Aviva Australia was purchased by NAB
2-AMP Financial Planning-1314-AMP Life
4-Millennium 3 Financial Services-631-ANZ (formerly ING)
5-Commonwealth Financial Planning-730-CBA
6-NAB Financial Planning-502-NAB
7-ABN Amro Morgans-450-Bank of Scotland
8-Charter Financial Planning-462-AXA-Asia Pacific- In negotiations with NAB.(refer to ACCC)
9-MLC/Garvan Financial Planning-471-NAB
10-Financial Wisdom-444-CBA
11-Securitor-438-Asguard –Who has a parent company called Westpac
12-Westpac Financial Planning-554-Westpac
13-Axa Financial Planning-356-AXA- Negotions with NAB (refer to ACC)
14-Genesys Wealth Advisers-366-Axa- Negotiations with NAB (refer to ACC)
15-ANZ Financial Planning-394-ANZ
And the list goes on with other common financial brand names such as Apogee (NAB), Guardian Financial Planning (Asteron-who is ultimately Suncorp-Metway), MLC (NAB), BT (Westpac), Colonial First State (CBA), to name a few.
So where does my Mother and Father go to visit an independent Financial Planner that will be completely transparent? My thoughts are take a tax deductible trip overseas as Australia clearly does not have the answer. This sounds ridiculous (and "NO" I am not suggesting an O/S trip) but look at the above table and you will also see ridiculous! But in case you have an O/S trip in mind this little bit of trivia may help: Remember The Australian Taxation Office’s views on the deductibility of investment advice fees are expressed in Taxation Determination TD 95/60. In summary they will be deductible to the extent that they are on-going management fees or retainers incurred in servicing or managing assessable income earning investments, including switching between such investments, and not related to the acquisition of new investments. Tax advice fees charged by a registered tax advisor or a solicitor are tax deductible. Business advice, such as ideas for a business plan or a marketing plan, and employer superannuation contributions, are generally tax deductible. Fees for Centrelink advice, personal superannuation contributions and estate planning advice are generally not deductible (this is not legal or taxation advice only a view).
In the interests of full disclosure, number three above is Count Financial- Not for Sale.
Thanks for this number 8, please keep posting your controversy.
You forget the banks are in it for the money, purely and simply. How else can they post huge profits every year. The sad part is that mum and dads have nowhere to really go for unbiased financial planning. I am sure you are as unbiased as you can get, but others are paid to promote, and promote they will.
Keep it coming, probably wont change much but still interesting.
DDWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi Number 8,
Don't worry too much about being controversial, if everyone were the same life would be very boring, wouldn't it?
Regarding your views on financial planners, I generally agree with what you say. Most financial planners are generally misnamed, they're financial salespeople. They have products to sell, and they'll try and sell you one. Whether it's suitable for you, or is the best of it's type on the market, is pretty irrelevant. All they have is the products supplied by their affiliated company/bank. They also have sales targets to meet.
There are some financial advisors out there that are independent, but generally they're smaller firms or individuals, so may be more difficult to track down. I've dealt with one in Melbourne, so if you're in the area let me know and I'd be happy to pass on his contact details.
If you want a genuinely independent financial advisor, ask yourself one question. 'How much are you willing to pay for the advice?'. In my view, this is the root cause of the problem when it comes to the current system of financial advice.
Most people want advice, but are unwilling to pay for it. All the bigger companies know this, and this is why the bigger conmpanies get away with the commission-based business model that they run. If people are unwilling to pay for the advice, how do you think that the independent financial advisor make his living? By definition, he can't take commisions from the companies offering the product (or should hand it over to his client) because that would involve a potential conflict of interest. A truly independent advisor has to work in the best interests of his client.I guess I was wrong. Now look who is taking a large slice of count Financial. CBA has gone all guns blazing…… How disappointing that the truly independant Financial Planners are now close to nil- the banks own Australia.
I will stand strong and will claim to be one of the only truly independant Financial Planners. I have no ties with any banks or products. I claim honestly and transparently to find/ source the most suitable financial plan for my clients. No guns at my head!
I wished I could service all of Australia, but there is only one of me!!!!! How about some people stepping up to the plate and helping out a little.
Hi No.8.
Exposed wolves in sheep clothing appreciated always.
What kind of help do you want ?thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
I think that the financial advisers another kind of salesman, which is a very tough job and very difficult for people to understand it. I usually don’t like any of them, specially real estate agents as I have seen them saying so many lies to very innocent people that make me sick. On the other hand I have meet some valuable people in that area, but I think that they are very few and this is the main reason people don’t trust them.
Also with financial advise the big problem is that you always have a risk, it’s impossible to predict what is going to happen (specially now) with the economy, even if you have 10 MBA and all the studies you can imagine, economy is not something you can study like maths or many other science, it’s all about experience and trying to predict things that could happen.
What I think we need is financial education from the schools, the biggest mistake people make is expending more than they earn, it very simple, but many people don’t get it. Then they go to the banks for help and they don’t understand the value of the money until they get charged with all the fees which I agree they are usually to high, but if people is a bit smarter they can live using the free accounts, paying the full amount on the credit cards and only taking mortgages for houses, that usually is a good investment.
So in this environment the financial advisors could work a lot better and people will understand the value of the advise. And all the banks would have to work a lot harder to get profitsSorry if I went out of the topic, I just get very frustrated when people make very bad decisions and then blame others, and even more when they get rip off just for not reading forums like this before making decisions.
Hope this helps
Mosqui
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