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.
I think he is actually correct. Platforms and products are really becoming commodities so their selection really doesn’t mean much to the end customer. If you believe that they are commodities then the vertical integration is bad argument is a furthy. What matters is the strategic advice that an adviser gives and the value they add to a persons financial (and in many instances emotional) well being. And in that aspect there are good and bad advisers in vertically integrated models and in IFA models. I know this position doesn’t sit well with the “all banks and AMP advisers are hopeless” people but as I have said before, Mum and Dads don’t care about the vertically integrated v IFA model argument.
OK, Craig, why dont you compare the fee for service revenue generated for ‘advice’ and the so called insignificant product revenue you receive.
You also forget to mention about how your adviser and agency development bonuses are calculated and BOLR multiples, or is this how you define ‘as one that invests in advice’
You are so committed to AMPs own self interest and nothing else.
When the Disclaimer, Disclosure,Remuneration & Fee section of your SoAs are actually longer than the advice content of the document, you know you are conflicted
“self-interested parties”? Not like AMP then, AMP is only working for the public interest of course