Issuing the challenge to financial planners: take the high road

Brad Church, Chief Executive & Senior Adviser of Goodman private wealth advisers, has today issued his challenge to financial planners, who aspire to be leading professionals, to take the high road and not be aligned to financial product institutions.

Brad’s stand has been prompted by the steady stream of large financial planning groups being sold to financial product institutions, the most recent being the acquisition of SFG Australia by IOOF Holdings.

In August 2009, the Australian Securities and Investments Commission (ASIC) made a submission to the PJC Inquiry into Financial Products and Services in Australia and highlighted that the structure of the advice industry may affect the quality of advice being provided to consumers. One of the factors they raised was the “dual role played by a financial adviser in providing advice services to clients and selling products for product manufacturers”. At the time, ASIC stated that 85% of financial advisers were associated with a product manufacturer.

Since 2009 some of Australia’s largest financial planning groups have been bought by financial product institutions. These have included Count Financial, WB Financial, DKN Financial Group, Plan B Holdings and now SFG Australia which owns the Shadforth Financial Group brand.

“It’s time to take a stand”, said Mr Church. “ASIC raised their concern about product owned advisers back in 2009 and since then the financial services industry has continued to consolidate. This may be a profitable decision for those owners who sell-out, but as ASIC has highlighted, it affects the quality of advice being provided to consumers”.

“Advisers who work directly or indirectly for a financial product institution are part of that institution’s distribution network. It is inevitable that at some point those advisers will recommend a financial product that belongs to their parent institution. At that point you have to ask the question, whose side is the adviser on? Are they adviser to the client or salesperson for the institution?”

Goodman private wealth advisers has a clear vision and strategic plan built around its commitment to stay privately owned. Mr Church explains, “we are clear about why our firm exists. Our purpose is to have a significantly positive impact on the lives of our clients, their families and the community. We refuse to sell-out on that purpose.”

In conclusion, Mr Church said, “I appreciate that it is not an easy road to take, but let’s not forget that as financial planners we have such an important role to play in the lives of our clients. Let’s not compromise the advice we give by having an institutional owner influence what we recommend to our clients. I challenge all the financial planning professionals in this country to take the high road, step out from under the financial product institutions, and be privately owned”.