Speaking to ifa, Mr Quine has rejected suggestions made by ifa commenters that Wealth Market planners will be under pressure to sign off limited recourse borrowing arrangements within SMSFs by Ray White’s mortgage broking arm Loan Market.
“No – I mean that is a fairly long stretch to go from that to the other,” Mr Quine said. “I don’t think any of that is necessarily disseminated off the back of mortgage broking, I just think it is another door that leads people to that conversation.”
The announcement of Ray White’s intention to enter the advice market earlier this week, has sparked comments that the firm will be a pawn for its mortgage broking business Loan Market.
One reader questioned how the services of Wealth Market could “possibly be described as financial planning” as “it sounds more like property flogging”.
Another reader expressed their concerns as to whether the business culture would be “driven by sales commissions and rent roll commission”.
“How this sales culture is inoculated from the advice arm of the business is my biggest concern,” an anonymous commenter said.
“That and they want someone with ‘solid sales background’ means they may struggle with the concept of the ethical professional,” they said.
However, Mr Quine explained that Wealth Market will be able to assist the “record numbers” of people borrowing large amounts of money to be able to afford their own home – which he says is a predominant issue.
“The immediate need is protecting their assets and their ability to gain affordability and sustainability of that arrangement,” Mr Quine said.
Unfortunately, given Coles and Woolies are both now entering into the general insurance (car) space, the thought that they could potentially get into Planning as well is not so far fetched as it sounds.
The credibility of the Financial Advise industry really is under attack
Let’s think about this! ASIC are not regulating what the banks and institutions are handing sectors of the market now!
What if as Tim666 says.
“what next? Coles and Woolies to offer instore financial planning?”
God help financial stability if there is no real shake up and soon.
Its been implied by others but this gets to the crux of the dominant issue the industry faces about being real about conflicts and true independence. A real estate group today, what next? An art gallery, antique car dealer, Chinese noodle bar franchise etc. An absolute joke and until the industry gets on board with the UK concept of unambiguous independence or “restricted” then we are all doomed to continued ridicule and irrelevance by the broader (reasonable) customer community.
What a load of crap! There will be no difference between the major banks owning their advice arms and flogging their products as to when real estate agents and their affiliated brokers who will all receive referral fees and most likely on on-going commissions. Another vertically integrated institution who sees a money tree from SMSFs
what next? Coles and Woolies to offer instore financial planning?
Not even worth commenting on , it has all been said before
How can it work? all they know is comm, comm,comm! handing out brochures and heaps of keys dangling off chains, FOFA should be thrown in the bin if this is allowed, the Industry will just be pulled back 100% into a sales commission based culture, that is all they know, sorry but true.
The biggest protection of assets is to NOT BORROW SO MUCH. Life policies aren’t going to protect people from bankruptcy unless they get sick and die. Just wait for interest rates to start going up again and we’ll see how things fare then.
The potential conflicts of interest here are enormous, but no more than the those faced by aligned distribution networks where the APL is controlled by the licence holder / product producer etc
think the predominate strategy will be for the planner to recommend setting up a SMSF and invest in property….Ray White can sell you the property, manage the property for you and Loan Market can get u the finance. Whilst you are at it you need life, TPD, trauma and income protection insurance with that…..who wins RAY WHITE group
Being the devils advocate here, but the vast majority of advertisements for Financial Planner vacancies stress ‘sales skills’/ ‘sales background’ as a pre-requisite. This is disheartening, but not unique to Ray White.
I would have thought Ray White would see the huge potential to sell wealth protection to the newly indebted. Presumably the property agent would ‘advise’ on property, with the financial planner advising on Life, TPD, trauma and Income Protection insurance.