CBA to bet on goals-based advice

The Commonwealth Bank will transition to an objectives-based advice model, following a similar move by rival AMP.

Sources with knowledge of the matter, speaking to ifa under condition of anonymity, have confirmed that over the next 12 months the bank will move away from its traditional advice delivery model to adopt a goals- or objectives-based approach under its “Future Advice Model” plans.

The rollout will follow the development of the CommBank Café initiative currently being piloted, ifa understands.

Late last year, the CBA launched the CommBank Café campaign to encourage customers to visit CBA advisers in a cafe setting where they could discuss broad-based general financial matters with the option of proceeding further into the advice process if they wanted to.

While a CBA spokesperson was unable to confirm or deny any plans currently underway, Rick di Cristoforo, the bank’s general manager of advice strategy and projects, spoke to ifa about the CommBank Café initiative more broadly.

“One of the takeaways from the CommBank Café was the comfort customers felt in the café environment to talk about their goals and what is important to them, which reinforces the value of objective-based advice in attracting more Australians to seek financial advice,” he said.

“We are constantly improving and developing our conversations with our customers, so we can get to the heart of what makes them comfortable and what they need, because the more comfortable they are, the more likely they are to take action to help themselves.”

In a LinkedIn post discussing the launch of a CommBank Café session in 2016, seen by ifa, one bank employee said, “It was a pleasure to support our partners at Wealth to help achieve over 150 quality goals- and needs-based conversions on the day. Looking forward to seeing the project evolve and take off around Australia.”

Meanwhile, CBA general manager, wealth management, Hugh Humphrey also took to social media to praise the project.

“We took financial advice to the people yesterday,” Mr Humphrey said.

The comments come as ifa has revealed AMP has plans to take its goals-modelling technology to its wider dealer group network and possibly the IFA market.

The institutions have been criticised in the past for creating hype around the concept of goals-based advice when smaller advice firms have been relying on this approach to drive business for years.

Clarification: This article has been amended to remove any inference that CommBank Cafe is an "objectives-based advice initiative". Rather, a spokesperson for CBA has clarified that CommBank Cafe is a "marketing initiative to engage with customers". 

 

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