According to the Roy Morgan 2014 Single Source survey – which was compiled off the back of interviews with 40,000 financial planning clients and released yesterday – an even greater number of consumers are in the dark about institutional ownership now than they were 12 months ago, when the survey was last conducted.
The latest figures reveal that 55 per cent of clients of advisers licensed by the CBA’s Financial Wisdom licensee perceive their adviser to be “independent”, up from 51 per cent in last year’s survey, while 42 per cent consider (CBA-aligned) Count Financial to be “independent”, up from 33 per cent.
The four per cent increase in ignorance of Financial Wisdom’s ownership comes despite increased mainstream media attention to the dealer group as a result of the class action lawsuit proposed by Shine Lawyers and alleged behaviour of former authorised rep Rollo Sherriff.
Similarly, 50 per cent of clients of (NAB-aligned) Godfrey Pembroke perceive the dealer group as “independent”, up from 48 per cent in 2013, while perceptions of the independence of ANZ’s RetireInvest AFSL remained steady at 37 per cent.
Meanwhile, the number of clients who consider “Commonwealth Bank branded financial planners to be independent” has fallen from 21 per cent to 14 per cent, with the report concluding the “main area of confusion regarding the independence of financial planning occurs when the planner is branded differently to the major fund manager that owns the planning group”.
Commenting on the findings, Roy Morgan spokesperson Norman Morris said the statistics come at a time when non-conflicted, independent advice is in the spotlight.
“With a large proportion of advisers being owned by fund managers the need for clients to understand the extent to which their adviser is independent will become critical and should not be confused by branding,” Mr Morris said.
Pity some lawyer doesn’t simply run a Trade Practices Action about misleading and deceptive conductive and let a judge decide on the balance of probabilities what the instos are trying to do. Clearly the underlying business case and outcome is going to put any wordy disclosure in an SoA, or fine print on a website, into context.
But disclosure is not enough – how many times do you have to read on this webiste that it has clealruly failed. the time has come for the lies to end. finwiz, hillross, godfrey pembrake etc. all need to fess up to their clients and adopt the branding of their bosses. on stationery, on windows, on letterheads, not just in soas
This is all down to the perception of the client and their understanding of ‘independent’. Clients may have the view that if their, say, Financial Wisdom adviser does not work for CBA (not in a bank branch etc)the adviser is independent. They may not know the relationship between Fin Wiz and the CBA until they are told or it is pointed out to them in the FSG and clearly disclosed in an SoA.
The legislation requires clear disclosure (in FSG and SoA)of the relationship between an Authorised Representative and a product issuer and which licensee has authorised the adviser.