Commentators have reacted angrily to AMP’s “holier than thou” submission to the Murray Inquiry, rejecting suggestions that vertical integrators are more innovative.
AMP’s second submission to the FSI argued that “advice from ‘independents’ has proved to be the most damaging to consumers” and that “only vertically integrated companies have the financial capacity to invest in the development of new and high quality financial advice solutions for consumers”.
ifa received more than 25 comments on the news story, a vast majority of which voiced clear opposition to the assertions outlined in the submission.
In addition, DomaCom general manager, sales and marketing, Warren Gibson issued a statement condemning the AMP submission as reflecting a “holier than thou perception of independents”.
“The assertion promulgated by AMP that only vertically integrated advice groups have the financial capacity for innovation, offer additional value to the Australian community and are better placed to assist ASIC, is utter rubbish and reflected in the growth of independent firms and a move away from verticals by many advisers who feel restrained from providing best interest advice,” Mr Gibson said.
“These advisers no doubt are being replaced quickly to fill any small void and ensure no empty work stations.”
Mr Gibson added that “financial disasters emanating from independent firms like Storm” – which is presumably the “damaging” cases alluded to in the submission – do not occur without “significant help from errant fund managers and banks with poor lending processes”.
AIOFP executive director Peter Johnston also hit out at the claims made by the financial services giant, picking up on a similar theme as Mr Gibson in terms of the role of IFAs in the wake of financial collapses.
“The independent sector is getting very tired of being blamed for product failure and especially by institutions that have a less than perfect track record with compliance and product development [and] failure,” Mr Johnston told ifa.
“It is about time the likes of AMP decided whether they are a product manufacturer or a serious advisory business – in the emerging new world you cannot be both.”
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