Hot topic of the week… CBA and ASIC get defensive

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A story about a televised investigation into the Commonwealth Financial Planning scandal almost incited a comment riot on the Wealth Professional forum.

The hot topic was the validity of bank versus non-bank aligned advisers, and we received well over 40 opinions. Perhaps this is testament to the fact that planners are certainly a passionate bunch.

Mark Longhurst kicked the discussion off by suggesting that banks should be banned from calling their staff financial planners: “If you are pushing product for a provider you shouldn't be allowed to sully the reputation of real planners!”

Such comments are insulting, asserted Ben CFP: “I work for a bank and my advice revolves around strategy and what is best for my client (I have been a planner for 20 years)! There are plenty of planners who are not aligned with a bank yet still provide crap advice and are only product centric.”

Not Surprised drew on personal experience, and said banks place unrealistic targets on planners: “At the end of the day I do what is right for the client no matter what and this quite often upsets the bank because it means I haven't obtained revenue from that client (even though on the surface they try and make it appear that they are interested in the client).”

Many of you, like James Howarth, called for the complete separation of advice and product as the only way forward towards professionalisation.

Some offered their own solutions.

Jacki said simplifying the compliance and regulations to make it easier for financial planners to follow, having independent audit companies that report to ASIC, and providing greater guidance to clients on who they are receiving advice from, will all go a long way to improve the industry.

Let's not get sucked into generalising bank planners as crooks or commission-hungry salesmen, said Innocent Observer: “Also, let's be careful not to get suckered into focusing solely on product. Sure, having everything in a CBA-aligned product might not be the absolute most efficient structure, but as products are only a conduit for strategy we shouldn't jump to conclusions on the validity or quality of advice.”

Matthew Ross called on advisers to take a stand. He said a sales culture is present somewhere in every bank, insurance company and fund manager that employs financial planners: “How can you turn a blind eye to that and say 'not my problem - I operate as a professional and that's all I have to worry about'? I am not aligned to a product provider and I see all this as my problem. It's time financial planners aligned to product providers showed some true courage and integrity and put in place a plan to break the link between product providers and themselves.”

See the story and more comments here.