There is a war on between the big boys and the independents. Or alternatively the war is between the independent advisers and the product issuers.
I first wish to disclose that I am a shareholder of various financial institutions and an “independent” adviser and thus it does not matter to me who wins.
Why have the big institutions agreed to stop receiving commissions? Because they are product issuers or asset managers and can thus earn their profit via the back door as management fees. They can then pay their sales force a fixed salary. The more productive salesman will be on a high salary and the incompetant will get the boot. This tame salaried sales force will of course only sell his employers products. You do not walk into a Wespac branch if you expect to receive advice on an ANZ product.
Alternatively products will be sold by marketing or over the internet with that famous warning on the inside cove saying that you should speak to your advisor and we disclaim all responsibility even though we are selling you the product.
The independent adviser thus has the problem that he cannot get his remuneration through the back door via commissions. Thus the Counts and Lifespans who are not owned by the product suppliers have to ask the client up front for big bucks. Bye bye independent advice!
