Clients don't understand independence

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Roy Morgan has discovered how unaware clients are of their planner’s ‘independent’ status.

According to the organisation’s latest single source survey, clients find independence confusing, particularly when the planner is branded differently to the major fund manager that owns the planning group.

For example, 51% of the clients using Financial Wisdom (owned by the Commonwealth Bank) consider it to be independent, which is well ahead of the 21% who consider Commonwealth Bank branded planners to be independent.

This was the same across all the major banks. Almost half (48%) of clients perceive NAB’s Godfrey Pembroke to be independent, RetireInvest (owned by ANZ) was considered independent by 37% of clients, and Westpac’s St George was perceived as independent by 23% of clients.

 Planners labelled as belonging to the major banks were generally understood to be aligned, with only 7% believing Westpac planners were independent, 13% for ANZ, 15% for NAB and 21% for Commonwealth Bank.

Roy Morgan industry communications director Norman Morris said that the retail funds management sector will increasingly rely on their adviser network to retain customers, while acting in the best interests of their client.

“With a large proportion of advisers being owned by fund managers the need for clients to understand the extent to which their adviser is independent will become critical and should not be confused by branding,” said Morris.

“The Roy Morgan Research ‘Image of Professions Survey, 2013’, conducted in April showed that only 25% of the population rated financial planners as either ‘very high’ or ‘high’ for ethics and honesty. There is still some way to go in explaining the lack of trust that currently exists towards the profession.”