Clients against vertical integration
The findings of Centric Wealth’s client advisory group indicate a clear preference among consumers for non-aligned advisers and hostility to vertically integrated models, according to chief executive Phil Kearns.
Speaking to ifa, Kearns said his organisation’s official client advisory group – which is chaired by an independent professor of ethics and meets regularly to provide feedback on services provided and business strategy – said there are some clear priorities emerging in these sessions.
“Non-alignment is an incredible positive for future clients; our clients certainly provide us with feedback that they value what they call our ‘independence’, which we inform them they should call ‘non-alignment’,” he said.
“This issue [of vertical integration] is on the radar of consumers. Our client advisory group is clearly sending us a message that they want three things: security, value and honesty. That honesty really boiled down to non-alignment – they wanted to be sure that we weren’t getting kickbacks and commissions and that sort of thing.
“In terms of security, they want to know who our board members are, what our investment strategy is, and that transparency clients are looking for fits well with a non-aligned structure.”
Based on his experience with the client advisory sessions, Kearns said consumers will pick up on any “loopholes” in the remuneration system in the wake of Future of Financial Advice implementation and will vote with their feet.
“Our feedback suggests any conflicts of interest would turn them off that company,” he said.
“If you can afford to be as open and transparent as possible and not have to rely on loopholes, we think that is positive in the eyes of clients and will work to your advantage in the long term.”
Kearns said the meetings allow the company’s management to hear ideas from the general public, some of which he says he intends to implement, as well as for clients to better understand the compliance restraints under which advice companies operate.
Class action filed over grandfathered commissions
Major law firm Slater and Gordon has today filed a class action on behalf of 500...
AFSL forced to shut down robo-advice tool
A Sydney-based licensee has voluntarily shut down two digital advice tools follo...
Closing advice gap on ASIC’s radar for 2020
ASIC chair James Shipton says he is “acutely aware” of the growing shortfall...