Dunn says the approach to running the group’s financial planning businesses will be “an approach that will improve their businesses going forward, and their growth prospects – not the opposite”.
“No one is seeking to impose anything on those adviser groups,” he says.
“[On] the branding options for an AXA financial planner, no one will be asked to become an AMP financial planner or adviser.
“Whilst there will be some change, we’re working for that change for those advisers to be positive and positive for their clients and an improvement in their value proposition…and to continue to grow and improve their businesses as they do today.”
Dunn says there is “real passion and empathy for that, in both businesses, because effectively that’s what both businesses have done since their birth”.
“I know the value my financial adviser brings me,” he says.
“There’s real passion and belief in what they do and the value they can bring. Going back to the questions around FoFA, one of the disappointing aspects around the whole industry is that so few people seek to take advantage of financial advice. Anything that we can do as an industry and a profession to grow the confidence that Craig talked about, the better.
“That’s an opportunity with the merged group – not only to grow the businesses of our advisers through the things we said before that we can bring, but to substantially increase the overall size of the market by making clear the benefit that more Australians could get from seeking financial advice.”
AMP has not been publicly outspoken about the changes it supports and those it opposes. Rather, it has done its lobbying via the Financial Services Council (FSC), the organisation whose members’ financial advisory networks (FANs) account for about 80 per cent of all financial planners in Australia.
But where changes are proposed that AMP agrees with, Meller says, it has moved quickly to adapt its business.
“If you look at the changes that the industry has made over the last couple of years, before there was any outcome from the Ripoll inquiry, the FSC had already moved to remove commission from investment and superannuation products, through its superannuation charter,” Meller says.
“I’m not sure if it was the day before or the day after that was announced, we announced that we would be moving to that from the first of July last year, even though compliance with that isn’t required until the first of July 2012. You can rest assured that within the FSC, our representations were very much that this had to happen. Influencing the industry to do that has been critical. And I’d have to say, the AXA representatives at the time were fully supportive. That’s one of the reasons that the AXA business chose to be compliant from the first of July last year, too.
“So our feeling is that we’ve had industry influence, but also changed our businesses faster than the industry needed to, to encourage the others, if you like.”
Dunn says a significant part of winning public trust and confidence is to make sure financial planning is not only affordable to more people, but accessible as well.
“There are clients who are looking to sit down with a financial adviser and pretty well get advice that goes right across the spectrum of all their financial needs, and they want peace of mind on a whole series of things, and so they expect a very holistic approach to their advice,” he says.
“There are other Australians who from time to time will seek advice in a specific area – maybe they’ve just got married and they’ve having a family, and the advice they want is on protecting their home in the event of some misfortune. They’re not ready or they’re not seeking more complex advice in other areas. I think having a program where you can have for those who want it very holistic complex advice to more simplistic focused advice, that meets the needs of that person at that time, is also an important change. That’s a learning we’ve built on following FSR when it first came out and how the industry is evolving – and a lot of research we’ve done with consumers [that shows] different groups want different things from a financial adviser.”
Dunn says the industry generally also has to get better at explaining the value of advice.
“I think a lot of financial advisers underestimate the value that they do provide for clients. We’ve got to shift the focus onto that as well as it being value for money,” he says.
“That’s the challenge and that’s the opportunity. Because you’re right – people who have got a financial adviser see the value and they’ve got a lot of confidence in the value of what they get. It’s the Australians who don’t do it that don’t have that view.
“One of the things that we’ve been very conscious of through the launch of the Horizons Academy is that big institutions like AMP have a responsibility to invest in the future of the industry, and the future planners coming into the industry. It’s not a small investment, Horizons, but it’s critical in getting people to come into the industry. And it is about being accessible and being on the front foot and being among the community, and sharing the value that can be provided.
“But if there was an easy answer we’d have solved it by now. It’s a good question.”