On Tuesday, the big four bank announced that it would cease providing advice services following a “strategic review” of the remaining CFP business and a partnership with AIA Australia to include an advice referral arrangement originally announced in July.
“CFP customers with life insurance, superannuation and wealth advice needs who meet AIA’s licence and have not opted-out of the transfer are being closely supported with a smooth transition to AIA to help manage their ongoing financial planning needs,” CBA announced in a statement.
“CFP customers who have financial advice in progress will continue to be supported by CFP to complete and implement the advice before 30 November 2021.”
In April, AIA completed the acquisition of CBA’s life insurance portfolio, including products under the CommInsure, Colonial and Commonwealth Financial Services brands.
Following the launch of AIA Financial Wellbeing in July, CBA group executive of retail banking services Angus Sullivan said the move would progress the bank’s strategy to “reimagine” the products and services on offer to customers.
AIA Australia CEO and managing director Damien Mu called the launch of the advice arm as a “transformational milestone”.
READ MORE: Commonwealth Bank to cease providing advice services next month
The Royal Commission has gutted the industry.
Advisers with 20+ years experience who are exceedingly knowledgeable are leaving the industry within the next 5 years due to unreasonable additional ‘box ticking’ education requirements. And don’t start me on the absurd FASEA exam.
Changes were needed in the industry, but never has the term ‘threw the baby out with the bath water’ been so apt.
After they spent 2 years churning all their client portfolios into CBA’s Managed Account within CFS, to then terminate the managed account, orphan the clients and tell them they are on their own. CBA acting ethically as always.
Sounds like what ANZ are doing with their OnePath clients into Netwealth!
I was a Certified Financial Planner and took it off my stationary…not only due to this continued reference but the appearance of the FPA at the Royal Commission. This year I got rid of the FPA altogether and the departure of CFP means things are looking up.
No doubt IOOF will be looking to pick up the scraps (again)
No surprises there since CBA was the “Gold Medal” winner of misconduct during the Royal Commission.
But this does send a warning shot to the rest of us financial advisors, because if the big end of town are jumping ship on the financial planning sector (CBA, ANZ, BT, HSBC) then what are us IFA’s still doing holding the hot potato???
I’m not sure the headline is accurate. My understanding is that CBA is still providing financial advice to “wholesale” clients via its private banking arm, which has grown significantly.
Lowly regulated financial advice is a huge growth area at the moment. “Wholesale”, “Fintech”, “Financial Coaching”, “Property Wealth Creation”, “General Advice”, and “Social Media Advice” are all expanding as a result of regulators persecuting professional licensed advisers, while allowing everyone else to do whatever they like. Most consumers have far less protection now than ever before.
Of course the small minority of dodgy licensed advisers, who the regulators used to justify their persecution campaign in the first place, were some of the first ones to make the shift to the unregulated space. We now have the bizarre situation where most regulatory resources are focused on persecuting innocent, honest, advisers, while very little is being done to protect consumers from genuine harm.
Comment of the week and perfect summation of the outcome sought by Frydenburg.
I am quite sure ASIC will be focusing on “Wholesale”, “Fintech”, “Financial Coaching”, “Property Wealth Creation”, “General Advice”, and “Social Media Advice” proportionately more than licensed / authorised financial advisers in the future. There is a very thin line between personal advice and general advice and, you take your chances with classing a client as wholesale when they have a house valued at $2.5M and that’s the basis for wholesale advice.
Why? When? What possible indication has there been of regulators shifting focus? Certainly all the rhetoric from Jane Hume, the Minister for Fintech and Tik Tok, would suggest she fully supports even greater expansion of unregulated advice channels where consumers are most likely to encounter harm.
Small minority – lol. Keep fooling yourself that the drastically reducing adviser numbers are because of the ‘red tape’ – not because the gravy train had the breaks applied hard and you actually have to work to make money in the industry now. The bad eggs were not small in number.
really good summary Anonymous – so true… and with their usual form, ASIC will catch up with the ‘low-regulated’ coaches etc, in about 10 years
Death by a thousand regulatory cuts!
Any decent adviser left there years ago
The line about CFP supporting clients to implement is incorrect. I had clients in yesterday who had been stuffed around for 4 weeks before being told in August that CFP won’t be able to provide them the advice despite the fact they have already collected all their details and waited 4 weeks.
They were doing downsizer contributions so they lost a lot of the 90 days they have to contribute.
They needed to see an Industry Fund financial planner if they needed to get this done in a timely manner,
Sit with the clients and call the ATO and ask for an extension, they are quite lenient on that front.
Don’t see how this is gonna help the average Australian access affordable advice. Another ‘unintended consequence’ of the Royal Commission
Not so unintended…Robo advise is coming…to bring yet another failure…
another one bites the dust…RIP
Close to 3 years after Westpac saw no value in financial planning, and difficulties in being profitable, CBA finally realised it as well. Good old Don Nguyen strikes again…