In its latest Superannuation and Wealth Management in Australia report, research firm Roy Morgan found super products recommended by AMP, Commonwealth Bank, NAB, Westpac and ANZ-aligned advisers is more likely to be an in-house product.
Speaking to ifa, Roy Morgan industry communications director Norman Morris said on average, 74.9 per cent of super products recommended by the major institutions’ advisers was their own.
“74.9 per cent of people getting a superannuation product through a planner will end up with a product from that planner,” he said.
“There’s a definite bias, now whether that’s against the customer’s interests or not is another whole point.”
This average encompasses all the brands owned by the major institutions.
The firm’s research also found that many clients are unaware of dealer group ownership structures, with many mistakenly believing dealer groups owned by major institutions are actually independent.
Mr Morris said this is especially true with businesses whose names bear little resemblance to that of their owner.
“Basically, if the name’s different [clients] don’t know who the parent is,” he said.
[quote=Concerned]While the report is somewhat damning, I suspect in the majority of cases there isn’t much difference from one super product to another . it is the wholesale abuse of the system where Life risk products are recommended by Brand alone that concerns me [/quote]
I agree. I think the pricing (with increased transparency) of the platforms gets closer by the day. The platforms are also not adverse to copying each others functionality. Best Interest Duty on the pricing of the platform, with 10-15 bips separating the whole market, almost seems like red tape.
Personally, if I was advising today, I would find a non bank, non union platform and support them (within the confines of the law).
Roy Morgan are probably as bad as Rice Warner when it comes to this sort of thing. They’ve been knobbled by the Union Super Funds and only sing one tune. When have u ever seen a Rice Warner article that isnt glowing of Union Super? It just doesnt happen. But how many people that go to see a Union Super Adviser end up in anything but a Union Super Fund? There’s the story but i’m sure that you would never ever be able to get that sort of information out of Union Super. Any requests for it would be branded Union bashing in the parliament by Shorten et al.
This is either a poorly written article ( or promo / add ) or really bad piece of research , can someone tell me which one it is please ??
Why no stats on the percentage of clients seeing an accountant that end up in an SMSF?
Frankly I am surprised it is that low. But the bigger question is why Roy Morgan are only picking on the banks. Industry funds are probably just as bad, perhaps worse. But we don’t know the answer because Roy Morgan have chosen to play favourites. I wonder if industry funds paid for the research? If so, was it disclosed.
So where is the analysis of the performance outcome for the recommended investments ? I saw a client who achieved a 25% return over the last 12 months in an accelerated growth fund managed by a major insto. Surely the outcome is the most important measure of success. But don’t ask the industry funds to implement unit pricing as it will prevent them from distorting their returns to market their superior performance. The noise of our industry is as bad as our politician’s. Solely focused on one upmanship rather than the greater good.
Seriously – this is news! 1. Who is surprised and 2. doesn’t necessarily mean on the face of it that it’s bad advice. Fine if you want to attack the majors, because there has been plenty to attach in recent years and they have brought it upon themselves. However, the majors aren’t the only ones with product conflicts. How many of the mid-tiers with their own platforms (and especially those with `robo-advice’ to channel) do you think are doing any different. In my view the mid-tiers are more of a risk to consumers because their conflicts are in the main not as transparent and they may not have the capital of the majors if things go wrong.
So what? There is absolutely nothing wrong with AMP or CBA branded advisers recommending products from those companies. It is what the client would expect. It is why the client went to them in the first place.
However there is a great deal wrong with advisers operating under “independent sounding” brands recommending products from their ultimate institutional owners. It is misleading and deceptive. That is the real issue. Advisers using institutionally controlled sub brands such as Fin Wis, Charter, Hillross, Magnitude, Securitor, Shadforths, Bridges, etc need to be forced to operate under the headline brand of their ultimate institutional owner. Just as AMP FP and CBA FP advisers do.
and research shows that when you go to an industry super fund adviser 100% of all money goes into that industry super fund and also 100% of any proposed strategy involves adding 100% of any possible money to super….I’m sure Bill Shorten will address the numbers talked about in this article in the first term of his parliament early 2018.
I had the choice of which dealer group .I did my research and I joined MLC because of a good products range including Industry funds , good service to the adviser , good research and good client information in a clear and concise format . You wonder why I write MLC products ???……..Try and buy a Ford at a Holden dealership!.
Do clients know what MLC is and what your relationship is to the NAB? I doubt it.
Do your clients know that their are NAB & MLC people sitting around in your dealer group thinking how do we get Mark to write more business into MLC… I heard that conversation and it went as follows: “I know we’ll make Onepath, CFS and BT etc etc look crap, we’ll do things such as banning email communications, we’ll ban BDM visits, we’ll make the software program unworkable on anything other then MLC products, we’ll provide plenty of research on MLC products and we’ll make MLC look fantastic. We’ll turn the business into a cult but tell them they are free to select.” been there Mark and left. Go and get your own license or join a group of advisers before it’s too late.
anon 2 wow, so no business that sells, omg ive used that term, ever sits back and says how do we get more sales ! Im sure even you do !! I don’t buy into your anti agenda, tell me that no adviser has a preferred platform ????? Having been in platform sales nearly every adviser has a preferred, integrated or not, you need to find a new angle to bash the integrated as this is getting boring !!!!!
Nothing wrong with having a preferred platform…just so long as you’ve made the decisions without undue influence and consumers can clearly see any relationship with product and that relationship is disclosed.
Placing super into a ‘platform’ product does NOT mean that a client’s funds are invested entirely with that institution. There are a numerous platforms that offer access too the same funds/managers so I can make the same/similar investments by offering a different provider’s platform. Think there has to be a little more clarity in this article as well.
It took how much research to show this fact- one that most of the industry was aware of. Will this information now change anything in the industry??? maybe the term independent will get a positive review !!!!!
While the report is somewhat damning, I suspect in the majority of cases there isn’t much difference from one super product to another . it is the wholesale abuse of the system where Life risk products are recommended by Brand alone that concerns me