Former Wallaby Phil Kearns has been in the hot seat at Centric Wealth for five months and reflects on industry reform and the road ahead. After seven years at Investec, Kearns felt the need for a new challenge and started his new role as CEO of Centric in December last year.
Ian Knox Interesting article and views about re-emergence of independent morality but the truth is every major breakaway has been sponsored with cheques exceeding a million dollars. Not certain but I think it would be fair to say this also happened with Meritum? if so its hardly a corridor of truth to what the options were at the time.
FoFa is having a direct impact on thinking because margin sharing at product level is being squeezed ( VB's for example ) and net rate cards are making it hard to explain why some clients are on one rate and new ones on another.....
Equally the instos are now saying you can use open architecture but if you do....the subsidies at Dealer level reduce and you pay more for licensing - so the practices get anxious about paying for something they haven't paid for in the past and then start looking around for better value.Not many move though > look at the facts not the emotional commentators. Why would you choose an institutional licensee over an independent one?
Rory Mooney Having been selected as an inaugural member of the Most Trusted Adviser Network I can attest to the rigour that went with the process. As a leading planning business in South Australia we have always sought to benchmark our selves against our peers in order to ensure we provide leading edge advice solutions to our clients. Historically we have ensured we were hitting the mark by soliciting confirmation from clients through a bi-annual client survey. We were the first practise in Australia to carry the FP9000 designation (the iso for planners) and one of the first Professional Practises (FPA).
I can support the comments made by Adam and compliment he and Rebecca for the enormous amount of work that has been required in pulling this together, at a time when 'trust' has been severely tested by a few Inside the Most Trusted Adviser Network: How to get there, and how to stay there
Lindsay Binning The interesting thing amongst all the FoFA, Storm Financial and Commonwealth Financial Planning debate – is that, by and large – most of the Proper Authority holders in question were meeting the “letter of the law”. What I mean – is that – they had produced 100 page Statements of Advice (“SoA”), with appropriate wording and disclosure.
The essential problem was the INTEGRITY of the individuals / organisations. The actual advice ITSELF was the problem. More and more Legislation / Regulation will do little to fix this. For example how can ANY financial planner employed by a “product manufacturer”, satisfy the “best interests” duty? Every time they walk through the door and sit down at their desks – they are compromised – because they work FOR the owner of some of the product(s) – not the client. Also, the employee Advisers are part of a sales driven culture, where the best performers (those most highly paid and recognised) are those who have the biggest sales.
How on earth is a “best interest duty” going to be objectively assessed? The mere fact that such a basic premise has to be “codified” should be enough to suggest that there is a structural problem in the industry.
ASIC will respond by threatening to send to prison some poor sole practitioner operating out of Hobart, who forgot to get an “Authority to Proceed” dated – whilst just hoping that the thousands of Advisers employed by the institutions would just disappear from the media spotlight. The response of more and more Legislation / Regulation to try to “codify” integrity will, of course, not work.
All that it succeeds in doing – is making it increasingly difficult for those Advisers, who truly wish to provide an independent, unbiased and valuable advice service to their clients – to be able to effectively operate a business. In effect, it pushes more and more advisers into the aligned advice channel – which already accounts for over 80% of the financial advisers operating in Australia. This is the real issue – the “elephant in the room” that needs to be confronted and dealt with.
At the moment – the issue isn’t even being addressed. I mean – allegedly, a senior manager in Commonwealth Financial Planning actually fabricated a SoA, in an attempt to mitigate the genuine claims of one unfortunate investor. How bad do things have to get before ASIC will have the xxxxs to actually acknowledge, confront and deal with the issue!
I suspect that “they are too big to fail”. That is – the Banks are too big, too well resourced, have too powerful a lobby, too many lawyers and are therefore far too difficult for ASIC to do anything about.
What ASIC will do, is crucify some non-aligned sole practitioner and then say, ”look we are cracking down on these rogue Advisers” and just continue to do nothing about the REAL issue. Education standards must not slow growth in financial planner numbers
The Australian financial planning industry is evolving and going through lots of change.
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