Speaking at a roundtable event to launch Lonsec’s co-regulation white paper, AMP executive director, financial planning, Steve Helmich said debate over vertical integrated business models often neglects the long-term picture.
“Whenever you ask someone what they would pay for something and they don’t know what it is, no wonder you get a low-ball answer,” Mr Helmich said.
“We’ve got a job of selling the value of financial planning and the value of advice and what it can do to help change people’s lives. And then I think you’ll find the cross-subsidisation will go over time because consumers will understand what they do have to pay and will value it more.”
The former FPA chair said that both larger licensees and smaller players have an important role to play in growing the number of Australians receiving financial advice.
“I agree that in order to really sell the value of financial planning to the consumer we need different models,” he said.
“We need big players and smaller players. Consumers want choice, so we do need that in order to be successful, and you can’t have failures anywhere along that chain.”
Addressing the same roundtable discussion, current FPA chair Matthew Rowe said separating financial advice from product manufacturing would help sell the value financial planners offer and bring an end to conflicts of interest.
“It is my hope that [the profession] will move through short-term incentivisation and remuneration practices that lead to poor cultural outcome,” Mr Rowe said.
“It’s my hope that the leaders within industry and the profession would actually see that there is a benefit to this cultural change and that they’ll get behind and back professional standards.”
what a load BS, you whole model works on distribution network for your product,
sounds like a lot of crap to me, If they didn’t pay the millions in volume bonus’s the AMP planners may well leave. What’s next’ a ” marketing allowance” so they are forced to incentivise their group to write AMP product???
Given AMP paid a handsome price to acquire AXA (and the 1,500 odd aligned AXA advisers) I don’t think they’ll be changing their model just yet. No surprise that flows into AMP North have gone from less than $1BN p.a. pre AMP acquisition to $4BNp.a. with the AMP adviser machine behind it.
Applause for all of the above…. as an aside Gerry, I’m not sure why anyone would be doing a 100 page SoA? I thought these became extinct years ago. Best you have a chat with your compliance people, they are pulling your leg.
Great to hear that from AMP. Lets see what changes they make internally to their selling culture. Actions speak louder than words.
Notice the implicit message in what Helmich is saying: “yes, we do cross-subsidisation”. Another gotcha moment for IFA methinks!
Removing 50 to 100 page SOAs would be a start, then we could all focus more on efficient advice and less on butt protection. Just think about that…a person could actually walk into an adviser’s office, get some advice, pay the bill and walk out….is that a pipe dream or just too hard to comprehend for the industry heads?