Addressing the Association of Independently Owned Financial Planners (AIOFP) national conference in Hobart today, Senator Sinodinos said that while implementation of the government’s FOFA amendments was the “number one priority”, competition is also on the agenda.
Joking that he “comes from one of the ‘evil vertical integrators’” – having held senior roles at the National Australia Bank – the assistant treasurer said he is committed to seeing a “level playing field” in financial advice.
“We will monitor, along with the corporate regulator, the competitiveness of the industry,” Mr Sinodinos said.
“All advisers, no matter who they are licensed by, need to compete transparently on a level basis,” he said.
Too many Australian industries have lost competitiveness and independent contractors have often been most targeted, the senator said.
“John Howard understood the importance of independent small business,” he said.
The comments follow ASIC’s revelation in September that it sees inherent conflicts of interest in vertically integrated business models.
The spotlight should remain on CBA advice and Colonial First State. The witches coven that operate these businesses spent a swanky week in Europe on a study tour with cba advisers. What a joke.
Note the careful use of the word ‘monitor’! I can monitor anything for any amount of time without ever promising to take any action!
They are slick in Canberra!
This is very funny because I have been on both sides of the fence. I was thinking about it recently and I came to a conclusion that IFA’s were just as or maybe even more willing to tie themselves to one product provider for either risk or super.invesmtents. There were incentives to sell a certain amount with these providers and agreements on remunerations. The IFA i worked for was desperate during the GFC. Now being at one of the BIG BAD banks I can tell you that the one i work for is truly moving away from the vertical integration. It just shows that Mr Sinodinos isn’t fully informed.
Remember political parties need banks to run large ODs at election time
Liberals to embrace adviser utopia? Really? I don’t think so, just repaying a few nice words said by the AFA & FPA pre-election. Remember, pollies will say anything to get elected, and to keep the their natural allies happy
The banks have too much at stake to relinguish control now. Selling insurance to new home buyers is like shooting fish in a barrel, especially if you can do it with your own product line.
And we all know ASIC & ACCC will never investigate the obvious Third Line Forcing by loans clerks without a written complaint from a client. Given a choice of a slightly chaeper loan rate in return fom having to buy life cover from the bank, its a no brainer.
Distribution is KING and always will be. Banks don’t make a motza out of dealerships, but it sure brings in the bucks and controls the advisers
Arthur is just playing the good cop !
Let’s hope he is also refering to ISN in that scope of investigation…
Huge conflicts of interest exist within the big four and their product/advice channels.
They are becoming more and more difficult to manage. I note that the big four’s assurance function is being hampered somewhat as the money flows into related party funds from aligned AR and salaried advisers, which they can do nothing about.
Short of the best interest duty being tweaked and requiring advisers/licensee to conduct all client transactions/dealings at arms length, I cannot see how vertical integration conflict will be managed.
Lou Stergio
Quantum Compliance Services Pty Ltd
http://www.quantumcompliance.com.au
Isn’t this a refreshing change!
there is level playing field of 6, 4 banks & insurance company & Industry funds . Its a bit late when the IFA’s are less than 10% of the advisors & decreasing. Arthur wish you all the best but we all know you will not upset the apple cart as one day you will need a job again after politics. You have been NAB so you are well aware that these guys just want market share & best industry, FOFA etc though means well but, its just the Final nail for IFA, as are burdened with further compliance as unlike the big boys who manage your compliance & you can just go out and flog the branded products. Your head high in compliance, One of the worst is the FDS all the surface it appears to be good idea but causes endless headaches as clients are questioning why they are getting another bill! yes have tailored the FDS so easy to read etc But as client state we have already agreed to a fee, why are you telling me again??
Good luck with that. It’s all about margins and profits and is firmly entrenched. Besides, what’s there to look at really, ANZ just came out and said there was nothing to see and they are fully FoFA keen and ready…Best Interests Duty (check), fee for service (check), FDS and opt-in (check), nothing else to see here, move on….next