The steady industry trend away from vertical integration is not necessarily a positive move for financial advice clients, argues Synchron director Don Trapnell.
Speaking to ifa this week, Mr Trapnell said he expects to see more product providers move out of the advice distribution space.
However, this is will not benefit consumers, he said.
“I think we’re going to see more and more break down of the vertically integrated model and I don’t think it’s a good thing, to be honest,” he said.
“Provided the consumer knows that the adviser, the licensee and the product provider are all one in the same, I don’t see any conflicts involved. There is a conflict when the consumer doesn’t know.
“If we take that away, all we are doing is reducing the number of outlets. That’s not good for the consumer.”
Despite these views, however, Mr Trapnell said he continues to ensure that Synchron is and will never be vertically integrated.
Concerns emerged in July 2016 when the launch of investment platform Valant Capital was announced. Mr Trapnell and John Prossor, also a Synchron director, are shareholders of Valant.
The story had generated concerns from ifa readers, who claimed Synchron was no longer considered non-conflicted.
Mr Trapnell continues to refute these concerns.
“As much as I said that we don’t mind the vertically integrated model, we’re not vertically integrated. And we don’t want to give that appearance,” he said.
“At a Synchron PD day, you might not even see Valent there. Or you may see it as much as you might see Colonial First State or any other platform.
“Valant gets absolutely no favoured treatment whatsoever.”
Mr Trapnell also told ifa that the process of his replacement has been slightly pushed back.
In June 2016, ifa reported that Synchron had appointed a new compliance manager and was on the hunt for a general manager to slowly take over Mr Trapnell’s and Mr Prossor’s roles.
However, it may take another 18 months to two years to appoint a general manager, Mr Trapnell said.
“I love doing what I’m doing. I love my job,” he said.
“I’m not ready to hand the reins over.”
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