Westpac’s statements that banks make financial advice cheaper and more thorough has been strongly refuted by one of Australia’s newest national financial advice groups, Certainty Advice Group.
On 3 May, Westpac Banking Corp chief executive Brian Hartzer was quoted in the Australian Financial Review calling for the Labor opposition to reconsider recent statements regarding changes to negative gearing and their call for a Royal Commission into the industry.
In listing the benefits of bank advice as convenience, long-term relationships, lower pricing, thorough advice, and the ability to invest in technology, Hartzer conceals what few Australians realise: how much real advice the banks actually provide.
Is this a risky move for these big, brand-dependent institutions? Across Australia, providers of genuine, independent financial advice think so.
Annette Pulbrook, a Certainty Adviser from FinBiz in Warner’s Bay, sees this as an unwise brand strategy for the big banks.
“Banks have successfully confused Australians for years – they fail to differentiate between product advice and pure advice unaligned to product. One day their boards will realise their brands will continue to be damaged until they revert to their true skill – being good bankers with great products.”
Scott Farmer of Bravium in Canberra, and member of Certainty Advice Group, agrees.
“Banks have never made any money from real financial advice,” he says.
“They only ever make money when they sell products aligned to their advice. The sooner they return to pure banking the better for everyone.”
Jeff Thurecht, Certainty Adviser from Evalesco in Sydney adds: “Saying that their financial advice is the cheapest approach to real financial advice is like a pharmaceutical company saying their products are the cheapest approach to good long-term health. It just doesn’t make sense.”
So should banks stick to what they know and do best? For Australian investors to gain genuine, independent advice on their financial futures, Certainty Advisers Group thinks so.
“When customers just want impartial advice, no bank in the financial world has successfully built a real advice offering without any real or perceived product conflict,” says Managing Director of Certainty Advice Group, Jim Stackpool. “Banks’ brands will continue to be undermined until they clarify their message about their financial advice offer.
“Yes, we are lucky to have some of the best banks in the world here in Australia. However, Hartzer must realise sooner rather than later that their great brands will remain at risk whilst they continue to get this wrong.”