Financial advisers who aspire to be leading advice professionals should take the high road and not “sell out” to financial product institutions, says a boutique practice princpal.
Reflecting on the news that SFG Australia shareholders had voted to approve the takeover bid from IOOF, Goodman Private Wealth Advisers chief executive Brad Church said he has taken a stand against businesses becoming aligned with financial product institutions, saying it will compromise advice.
“This may be a profitable decision for those owners who sell out, but as ASIC has highlighted, it affects the quality of advice being provided to consumers,” Mr Church said.
“I challenge all the financial planning professionals in this country to take the high road, step out from under the financial product institutions, and be privately owned.
“It’s time to take a stand. ASIC raised their concern about product-owned advisers back in 2009 and since then the financial services industry has continued to consolidate.”
Mr Church said his comments follow the sale of financial planning groups, in large numbers, to financial product institutions, pointing to the SFG-IOOF deal specifically.
He also said advisers who work directly or indirectly for a financial product institution will inevitability recommend a financial product that belongs to their parent institution.
“At that point you have to ask the question, whose side is the adviser on? Are they adviser to the client or the salesperson for the institution?” Mr Church said.
“Let’s not compromise the advice we give by having an institutional owner influence what we recommend to our clients.”
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