AMP chief executive Craig Meller has publicly played down the role of product selection in financial advice and defended AMP’s business model as one that invests in advice.
In a speech to the Committee for Economic Development of Australia (CEDA) think tank, Mr Meller touched on the “hot topic” of quality financial advice, outlining AMP’s view about the true worth of advice.“Very few people I speak to understand the true nature of financial advice and where its real value lies,” Mr Meller said.
“Too many usually self-interested parties like to dumb down the definition of financial advice to just product selection. This is usually a ruse to justify a particular entrenched position – and is a million miles from where the true value of advice lies.”
Mr Meller laid out an advice provision philosophy that is outcome-based and focused on achieving a “suitable post-retirement income”, with asset allocation and product selection making up just 10 per cent of the advice process.
“Indeed, in an increasingly commoditised product world, product selection is the least important component of high quality financial advice,” he said.
“And that is why AMP is so committed to a vertically-integrated model.”
AMP’s vertically-integrated model allows it to “invest more in financial advice than any other business”; “bring in more advisers to the industry than any other business”; and to “train [its] advisers to higher standards”, Mr Meller said.
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