AMP’s second submission to the FSI argued that “advice from ‘independents’ has proved to be the most damaging to consumers” and that “only vertically integrated companies have the financial capacity to invest in the development of new and high quality financial advice solutions for consumers”.
ifa received more than 25 comments on the news story, a vast majority of which voiced clear opposition to the assertions outlined in the submission.
In addition, DomaCom general manager, sales and marketing, Warren Gibson issued a statement condemning the AMP submission as reflecting a “holier than thou perception of independents”.
“The assertion promulgated by AMP that only vertically integrated advice groups have the financial capacity for innovation, offer additional value to the Australian community and are better placed to assist ASIC, is utter rubbish and reflected in the growth of independent firms and a move away from verticals by many advisers who feel restrained from providing best interest advice,” Mr Gibson said.
“These advisers no doubt are being replaced quickly to fill any small void and ensure no empty work stations.”
Mr Gibson added that “financial disasters emanating from independent firms like Storm” – which is presumably the “damaging” cases alluded to in the submission – do not occur without “significant help from errant fund managers and banks with poor lending processes”.
AIOFP executive director Peter Johnston also hit out at the claims made by the financial services giant, picking up on a similar theme as Mr Gibson in terms of the role of IFAs in the wake of financial collapses.
“The independent sector is getting very tired of being blamed for product failure and especially by institutions that have a less than perfect track record with compliance and product development [and] failure,” Mr Johnston told ifa.
“It is about time the likes of AMP decided whether they are a product manufacturer or a serious advisory business – in the emerging new world you cannot be both.”
“advice from independents has proved to be the most damaging to consumers” – a hurtful, unsubstantiated smear against me personally and my business that smacks of desperation. You’d think amp would have enough spin doctors to stop that from going to print.
[quote name=”anti V-I”]Neil and Patrick, let’s be clear: mudslinging in the press and making public commentary is one thing – but what AMP has done is write to an official government inquiry to smear an entire segment of the business community (not to mention its own client base) simply because its business model is less assured than it once was and the world is waking up to the VI model’s problems. Independents have every right to be offended and IFA has every right to report it the way it has![/quote]
Sorry anti V-I, that’s not how I read their submission. Would be interested to know which part of it that you interpreted in that fashion.
Neil and Patrick, let’s be clear: mudslinging in the press and making public commentary is one thing – but what AMP has done is write to an official government inquiry to smear an entire segment of the business community (not to mention its own client base) simply because its business model is less assured than it once was and the world is waking up to the VI model’s problems. Independents have every right to be offended and IFA has every right to report it the way it has!
As an independent, I’ve always believed that there is plenty of room for both independent and ‘vertically integrated’ advisers. I’ve always defended bank/tied advisers believing that quality people can always be found in all walks of life, and internal bickering is toxic to the industry.
So it’s disappointing to read about AMP’s fundamentally flawed and self-serving claims this week. They need to fix this mis-step quickly or they will pay a significant price.
Self sabotage going on here. It’s like kicking an own goal in soccer.
None of this will result in better advice standards. It’s the whole process of advice that needs to change and there’s only small pockets of commentary on that which inevitably gets ignored.
Forgot to hand out an FSG..OMG…breach alert sound the alarms. Forgot to put a fee in the SOA…rogue adviser alert. Far more important things to focus on.
Where’s the diversity of advice in this industry…it’s dying. I can see why some say robots could do the same job in the future.
This sort of ongoing finger pointing and blaming will continue to happen until advisers take control of their industry rather than being dictated to by institutions. Banks and insurance companies don’t tell accountant or the real-estate industry what to do but our industry has always danced to their tune. We work by rules imposed by everyone else’s not our own. We as advisers have been lazy and let others run our industry and until we truly dictate what happens for ourselves this will continue. Its not to late.
Funny, when things are bad it was the adviser not the product provider
When things are good, it is the product provider not the Adviser
FPA screams EDUCATION is the key yet more Accountants go to jail than Advisers
Now Advisers continue to blame Advisers and those working for their big boss say they are the best yet those working for themselves (design their own APL) think they are the best.
All this why consumers believe you are all just money hungry duds (there words not mine)
Glad I moved away from all this crap- keep living the spin all of you
Guys this is all starting to miss the point & look very much like attempted point scoring & why advisers are in this mess.
Lets get one thing clear just because an adviser works for a vertically integrated advice business does not mean that ‘many advisers feel restrained from providing best interest advice’. Best interest advice can & still is provided to clients by vertically integrated advisers. It is just that their APL restricts which products they can use if their advice requires the use of products.
The reality is that most if not all licensees restrict what products go onto their APL. That is what an APL (approved product list) is by definition. Even independent advisers have APL’s and are similarly restricted in what they can suggest clients invest in. Does this mean that is not best interest advice? The issue is where advice is framed to suit the product to be used & is not in the clients best interest. This can be done by both aligned & non aligned advisers.
Well gee wiz – I thought as an industry you guys were past all this finger pointing and name calling but obviously not. Seems like another case of they said we said and so on and so on – yawn yawn. Move on and get on with the job of advising clients and do some good for a change and stop telling everyone that will listen just how good you are. Have you not hear the term “Don’t tell me – show me”?
REALLY, my god if the government buys this dribble by AMP then they are just a bunch of corrupt fools.
AMP say this as they ensure unbasis advice from their network by paying “marketing bonuses of $250,000” to their advisers who dont even have to declare these monies to their clients. FPA knows about it and does nothing, ASIC know about it and to nothing and yet they claim non aligned advisers are the root of the problem, really?
So a company makes a submission to a Government enquiry arguing in favour of its business model. Wow.
A reading of their submission shows that they are promoting their proffered benefits in the context of ensuring choice for consumers, not in the context of superiority to an IFA. Hey, it’s a free country and they are entitled to their opinion.
Australians are a very diverse lot and there is plenty of room for both non-aligned and aligned advisers in the marketplace for advice. And despite what some might say, both AMP and advisers in VI businesses understand that their legal duty to the client takes priority over commercial interests. In my experience, there really is little correlation between advice quality and an adviser’s business model.
I look forward to reading others submissions to the FSI, particularly the AOIFP’s. It might help clarify which side of the ‘product manufacturer’ vs ‘serious advice business’ dichotomy they are actually on.
Have those people who are damning AMP even read the submission? From their comments it seems not?
AMP support a range of models including independents and vertically integrated models.
It is some independents who seem to hold the view that the integrated model should not exist.
I do believe you can be a product manufacturer, service provider that supports products, service provider that supports advisers and the serious provider of quality advice. We never had a problem doing this at IPAC, and for 15 years IPAC has been owned by institutions.
If I look at the evolving world, I see “independent” advisers building or buying technology capability and funds management capability so that they can offer a more integrated service. Although I belong to “institutional integrated model” today I see this as a good and logical evolution that can meet client needs.
We need to focus on the objective of meeting client needs, not criticize others on how they do this.
Let’s not get sucked in to this BS argument, this entire debate on “independent” v “aligned” is simply designed to further fragment the financial planning industry and is being used as a diversionary tactic to turn the attention from the real issue. The matter at hand should be to ensure that each “proper authority holder” provides a comprehensive APL – without any incentives provided for the use of their own products (in the case of aligned), no incentives for white label products ( in the case of independent), and comprehensive enough to pass the light of day test . If we don’t speak up now we will end up with more useless drivel, more unnecessary costs , zero benefit and the status quo will remain.
Well said Warren.