Speaking at last week’s Association of Financial Advisers conference, BT Financial Group’s Matt Englund – managing director of the Securitor and Licensee Select businesses – said the directive that quality advice should trump growth concerns comes all the way from the top.
“There are two things that will get me a conversation with Gail Kelly; the first is a Securitor convention and the second is the risk of an EU [enforceable undertaking],” Mr Englund said. “An EU has the potential to damage the reputation of the bank and if anyone has been through one, they’re pretty difficult to handle – so a bank wants to stay away from one, and the outcome of that is being very clear about your filters.”
Mr Englund reflected on a “process earlier this year” whereby BT undertook “very very deep due diligence” of a number of advice firms en masse, who were seeking to join BT dealer groups as an example of the banking group’s commitment to the ‘quality over quantity’ directive.
“Having looked at 40 practices, we took nine – the others did all find homes in our industry, but what we saw was inconsistent with the culture that we have in our business and the quality of advice minimum standards we have in our business and, to be blunt, inconsistent with what we understand the law to be,” Mr Englund said. “Quality comes first, everything else is secondary.”
Mr Englund also expressed concern about the fact that the firms that did not pass through BT’s filtering process were able to find alternative licensing arrangements, describing it as a “major problem” for the industry.
That’s the whole problem in this business, there are no real standards or benchmarks to work off. What BT deem to be “quality” advice would be completely different to what any other licensee believe is quality and ASIC would also have a differing opinion of the same advice. It’s like asking 10 economists what they think will happen next year (financially) – you get 10 different answers, never consistent!