The ANZ boss was quizzed by MPs during a parliamentary hearing in Canberra on Friday (15 November), where he was asked why the bank has decided to keep its financial planning business.
“Financial planning is a valuable service for many members of the community. It has many challenges to it, frankly, in terms of operating it safely and soundly, but it’s actually a good thing,” Mr Elliott said.
“Many people should have a financial plan and I think going to your bank and expecting the bank to be able to help you get one is a reasonable expectation. There are different models for us to do that. We can do it because we have our own people. We can do it in partnership with somebody else. We’re still exploring those because each has a different risk profile.”
Mr Elliott described ANZ’s current advice offering, which employs approximately 200 salaried planners, as “small” and “very targeted”.
“We think it’s the right thing to do for now,” he said. “But, as I said, that world, from a regulatory point of view, from a reputational point of view and frankly from a business model point of view, is very challenged, so I imagine that that will continue to be reviewed in the future.”
When Westpac CEO Brian Hartzer appeared before the same committee earlier this month he admitted his regret over exiting advice but conceded that the economics simply don’t work.
Mr Elliott was asked by Labor MP Andrew Leigh if he could imagine fully divesting the advice business at some stage in the future.
“I imagine lots of things. I can imagine that that may well be an outcome,” Mr Elliott said.
“I think it would be an unfortunate outcome for the broader community. It wouldn’t have a material impact on ANZ, but it may well be one of the options that we consider in the future.”
Any financial adviser who doesn’t divest their financial planning business is, by definition, a bad financial adviser in the current environment.
This is due to the terrible risk/return profile of running an advice business.
We have a dogs breakfast of a regulatory regime as pointed out so clearly by the joint accounting bodies recently.
Enormous risk to the adviser from the changing labrynth of conflicting and out of date AFS rules. More and more band-aid oversight layers. Plus a complaints authority who can interpret things differently to all that. Then clients who have been groomed to not trust you and who resent the resultant cost of having to wade through all that before adding a scrap of value to them.
I would occasionally come across a new client and while looking at their life insurance and superannuation information they would volunteer tat they sought advice from their bank, to which I glibly replied “Oh so you bank ANZ then ” ! “how did you guess they would say, Easy said I, you have nothing but One Path products, irrespective of quality it is clear to me that you’re with who the bank wants you to be with,m not who is necessarily the best for you and your circumstances , nine times out of ten there were better, cheaper and more suitable options.
I worked for an ANZ owned licensee and left when I found out they were purposely making other platforms look poor in terms of adviser support, customer service. They were restricting emails, communications about fee changes as examples. I’d have clients ringing me up and these communications restrictions made me look bad and I started incorrectly forming a negative opinion about those product providers. Even restrictions were placed on BDM’s from these platforms. In short I’ve always believed these ANZ licensee’s are a cult and yet there advisers out there still thinking they have freedom of choice. After that experience I’ve always felt that the ownership by ANZ was never clearly disclosed. Do ANZ owned licensee’s still pay lower dealer group fees if you use an ANZ owned platform?
If only Shayne knew that it is not the Advisers or Regulatory environment that is the problem, it is his hopeless, unqualified AFSL Management Team who have no advice experience.
Seriously ,bagging out bank planners again, I for 1 have come from that environment & I know a lot of ethical & great planners from the banking world that have nothing but the clients best interest at heart with the tools they are provided with. Yes there are issues with financial planning in the bank, just like outside the bank, which I am seeing now but it is not as public. Yes the banks can set unrealistic targets, but everyone needs to stop bagging the bank planners as if they don’t know anything &/or are unethical, how about showing some support given what they are going through
Really?
I’m not sure many people are bagging the actual bank planners. They are bagging the banks for putting those planners in a difficult position to start with, then throwing them under the bus when things go wrong.
The reason that financial planning is challenging from a regulatory and reputational point of view is because banks set sales target for their directly employed product sales people and called them planners or advisers.
i dont agree. the regulatory environment is the most challenging area at the moment. conflicted standards and code of ethics are not being adhered to by everyone…. incentives / targets can be important in any workplace, to ensure staff are working productivity and efficiently. conflicted remuneration is and has always been the issue.. the planner should be rated if not already on client feedback, and positive feedback at that!
I’d suggest getting your facts correct – not the case for ANZ
An appropriate name you have used there ‘Old Fella’. Maybe dig a little deeper as to the banks advice model and planner targets/scorecards in the current environment before casting your stone.
Comforting news for ANZ advisers i’m sure, and the industry in general.