Speaking on the ifa podcast, Kelly Power, chief executive officer of superannuation at Colonial First State, said that while the royal commission exposed serious misconduct within the banking sector, it was also a valuable entry to the industry for young advisers.
“I just think it’s a completely different world that we’re in now, so much has changed, there’s been so much regulation, so much movement in the industry,” Ms Power said.
“Say what you want for some of that stuff from a conduct perspective, but what the banks did, which was great, was bring new planners into the market and really solving that, for want of a better word, mass advice gap.”
She added that with this pathway now a thing of the past, it is unclear whether a meaningful number of new advisers can be recruited to the profession.
“They had capital and they’re investing in digital tools and investing in supporting the advice community. I think that was a really important part of this evolution,” Ms Power said.
“A number of those planners, a very material number of those planners are now in small boutiques or self-licensed or have gone over to other institutions, non-bank aligned institutions. So, they did play a very important role.
“Now, do I think they’ll step back in? I don’t know the answer to that, but I absolutely think that there is a place for bringing more advisers into the market and particularly for those advisers that can provide that scaled mass advice to Australians that have $200,000, for example.”
According to Ms Power, there are programs that are aiming to plug the gap and help new advisers join the industry, but that the Quality of Advice Review (QAR) reforms could also provide a way forward.
“We launched a program last year, which was called CFS Elevate, a people and culture platform to help people through their [professional year] and support advisers through that part of their accreditation,” she said.
“I think this is where that tier two of the QAR will really play a role in our sort of call centre. We have lots of people that we’re training, bringing up in terms of accreditation and arguably, we could accredit them as advisers, we could train them to become advisers and give them a pathway to do that. So, that second tier QAR step does actually open up that opportunity for super funds, specifically.”
Whether or not banks will be welcomed back into the fold post-QAR is still up in the air, with Financial Services Minister Stephen Jones telling ifa last week that he is not inclined to involve banks and insurers, despite the QAR’s push.
Namely, the QAR doesn’t differentiate between super funds, banks, and insurers, and instead suggests that all institutions should be given expanded advisory powers in order to plug the advice gap. But Mr Jones disagrees.
“There’s no doubt if you’re able to crack it in super funds we can create some models which might be applicable,” Mr Jones told ifa.
“But I’ve also been pretty pragmatic and I said to the life insurers, and to the banks, ‘Tell me what you want to do, that you can’t do’. Let’s try to solve real problems without having to go to the effort of setting up major regulatory overhauls, let’s look at what you want to do that you think you can’t.”
To hear more from Kelly Power, tune in here.
“Say what you want for some of that stuff from a conduct perspective” – Try record sums ($4b and counting), in remediation to date. Try Banks cancelling and exiting advice on mass. Hardly immaterial stuff. This is a great example of the conflicts of interest that exist in Financial Services and the problems that the Industry has had to deal with over such a long period of time – predominately poorly designed and executed legislation as a result. It never ceases to amaze how after all of the appallingly bad behaviour and conduct by some, self-interest will always rise to the surface. The Code of Ethics that all advisers have had rammed down our throats and forced upon us in different forms seems lost again by the Powerbrokers amongst the pursuit of the almighty dollar.
I struggle to understand how a super fund and a bank are different in terms of vertical integration. Donations to political parties maybe but they are both conflicted.
I think a better pathway would be for the government to throw out their bad legislation currently preventing growth built up over the past 20 years. This should help to encourage new entrants to join the profession faster than those leaving and they could either first work for a corporation as Kelly is suggesting or a privately owned business who would be far more inclined to take on a grad vs the current mess of a professional year.
Wow – how short some memories are. It was as recently as 2021 that CBA Financial Planning turned off all adviser service fees and shut down their Licence. Why would they do that? That’s a big no – vertically integrated, conflicted and not progressing the path towards Professionalism.
“Say what you want for some of that stuff from a conduct perspective, but what the banks did, which was great, was bring new planners into the market and really solving that, for want of a better word, mass advice gap.”
It seems to me this lady is talking through the CFS hip pocket nerve – less CBA advisers, less flow of funds to CFS.
Those advisers left on the FAR are are paying dearly in an ASIC levy to fund the regulators activities since the banks departed. The standard of training with most, but not all, bank advisers was absolutely appalling. They seem to have acquired all the bad sales habits that were to be found in many tied agency advisers in the late 80s. Again, not all!
Part of that problem was caused by the fact that the supervisors of those bank advisers, let’s call them sales managers, had had work experience with those very same tied agencies. Who cares about what you’re team of bank advisers is up to, providing your override comes in each month, on top of your bank salary. There was clear evidence, provided in ASIC media releases, on one particular female CBA adviser from a regional centre who systemically committed fraud on her clients that somehow was never detected by her supervisors.
No Ms Power, there will be no “what have the Romans done for us” speech at this particular funeral. And hopefully no resurrection. Thankfully, most small AFSLs are very particular these days about hiring ex-bank advisers
Correct…
A fellow financial adviser once suggested that the banks operated like generals in the French Revolution. They just send out more and more unqualified troops (advisers) in the hope that some will eventually get through (sell policies) and damn the casualties along the way…
will we never learn? Banks back into advice? Only Harvard trained mensa members that are non-bank/super fund Financial Planners can be trusted. Sure, they don’t want to see the $200k investor but that’s not the point is it?