Financial advice will not become a profession while advisers are induced to sell financial products, says Credit Suisse.
Speaking to Fairfax publication BusinessDay, head of private banking at Credit Suisse Edward Jewell-Tait said the advice sector must take measures to remove conflicts of interest.
"The notion of cross-selling has been a popular strategy for a long time. And when it involves selling a product or service, there's no problem," Mr Jewell-Tait said, "but when it's couched in terms of financial advice, it becomes more complicated."
"It is simply not possible both to provide advice and sell products at the same time and problems inevitably arise when advisers are incentivised to give particular advice," he said.
"You simply can't have inducements. You can't have a situation where people are paid commissions on the products they sell at the same time as giving advice," he said.
Credit Suisse pays its staff a fixed salary with a bonus calculated on qualitative measures such as client satisfaction rather than tying remuneration to the number and size of trades a client executes.
"For us, if you're going to provide advice, you can't remunerate staff with commissions," Mr Jewell-Tait said.
Magellan wrapped up a tumultuous year with a 9 per cent drop in average funds under management.
With more still to come.
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