Coronis – which has 20 sales offices through Brisbane and the Gold Coast – has established a financial advice business under the AFSL of Financial Wisdom, the agency’s managing director Andrew Coronis told ifa.
Mr Coronis said the company was aiming to offer a full suite of property and financial services “under one roof”, including sales, property management, broking, conveyancing and advice.
“The vision for the business is not to be a real estate agency – the vision is to have a property-based heritage but to be more about financial solutions and moving solutions,” Mr Coronis said.
Asked whether advisers would face a conflict of interest through an affiliation with a real estate agency, Mr Coronis said the financial advice business would operate independently and “stand on its own two feet”.
“Because of the way we’ve structured our business, different businesses have different responsibilities,” he said.
“The one thing they have in common is that whatever is best for that client is what we will do.”
Mr Coronis also said Coronis advisers would not place an emphasis on property investment over other investment strategies.
“If that means telling someone not to buy property, that’s the culture that we’ll have,” he said.
In terms of referring from one business to the other, Mr Coronis said there would be “synergy” between the real estate and advice services but that no formal referral relationship existed and advisers were free to refer clients to other real estate agencies.
According to Mr Coronis, a major drawcard for the expansion was the need to give homebuyers more support.
“I believe as a real estate service we are a nucleus for what goes on around us but before we’ve never actually helped our clients understand the process better,” he said.
In addition, he suggested financial services offered a way to deepen and extend relationships with clients.
“If you come to buy a house from us today, we have a relationship but it’s hard to maintain long term because we’ve done our job,” he said.
“Whereas one of the things I love about financial services, like property management, is we create an ongoing relationship with the client.”
Mr Coronis told ifa’s sister publication Real Estate Business that the company received 70 per cent of its revenue from real estate services over 2014/2015, but hopes that share to fall to 40-50 per cent in 2016/2017.
The move follows the much-hyped entry of a Ray White sister company into the financial advice market under the name of Wealth Market.
Do I also see the potential conflict of interest and skewed advice? Absolutely. The story from the ‘inside’ was also disturbing.
But dear advice friends, might you be missing the message/ opportunity? What consumers are looking for is holistic advice on their major financial and lifestyle decisions and that invariably includes direct property. That the advice industry continues to exclude specific advice on property in its offering to clients is actually more distressing than the reverse trend now evident. Can’t you see the wake up call from the market? If you can’t/ won’t do it then don’t get all uppity when someone else does – even if badly. When will penny drop? I’m not sure, but it can’t happen soon enough – for all concerned.
I actually have a close friend who works as a RE agent for this group. While she is happy enough there is a constant harassment for them to ‘sell, sell sell’ through all levels of management, completely inherent in their culture – even to the degree that their ‘tribal leader’ (and that is seriously the terminology they use) was sending out emails to them on Christmas Eve supposedly motivating them (if you can call literally using swear words and abuse, motivational).
I can hardly see the culture fundamentally changing on the FP side, do you?
Is this the standard of entrant we want in our profession?
I’d have to concur with BBC’s comment, and advising both the FPA and AFA to make submissions to ASIC that they proactively pre-vett the compliance and advice/remuneration models of higher risk startups for the first 24 months.
If you can’t close the gate you can tether the horse from bolting.
Edward
Good speculation, no grounds or reference. I am not defending however, this kind of post is pure hypothetical.
Melb Planner (#11) there is a BIG difference here! A categorical conflict of interest is written all over this wall because there’s nothing stopping the agent from pairing up with a property developer on the side, investing some of their own money into the development scheme, inflating the prices by 30% then flogging them to SMSF and other investors who are clients of the same RE group. So now we have customers getting advice from the product manufacturer and distributor of their own product AND paying advice fees for that “privilege” too! At least storm sold products that were on an APL but this is vertical integration on steroids! As long as ASIC act on this arrangement within 2 or more years then the customer should be protected right!
Why wouldn’t it work? if the advice models are kept separate there is no conflict. This is no different than entering into a relationship with an accountant and servicing the clients needs.
Sounds like the beginning of the next “Storm” crisis, conflicts of interests everywhere, are you watching this ASIC?
No surpirse FinWiz is the dealer, where else would they get one from?
The financial planning business will be operate “independently”?? I thought ASIC didn’t allow this sort of advertising where there were obvious conflicts…..sorry….I meant “synergies”
What’s next CBA gets its own real estate license?
“Why don’t you also start selling used cars, flowers, dog food and even fresh fish!”
WHY NOT? Coles and Woolies do
Though I had a little laugh at the suggestion that Real Estate Agents are the nucleus of a ongoing client relationship.
and “That’s a No From Me”…. . .
conflicted remuneration everywhere……. and why would I know? 12 years experience as a licensed real estate agent, 18 years in the financial planning industry.
It’s like trying to mix oil and water.
God help the client….
A ‘One stop shop where we can stitch you up from every angle’.
Congratulations on taking the right steps to ensure your clients are true clients and not just a one off sale. Today’s clients are time poor and want to tell one person all thier information and then get all the advice across many areas all in one place. Great business model and great future and opportunity to show others it’s possible and above all profitable.
I can see the advice already…
“We recomend you setup an SMSF and buy overpriced QLD direct property off-the-plan from developers, who give us a $40,000 kickback per property, which is added on to the sale price”
Why don’t you also start selling used cars, flowers, dog food and even fresh fish!
Sounds a bit like a Devil on one shoulder and an angel on the other. I bet the property agents are looking forward to a database of buyers motivated by their advisers to buy. “Lucky you should say. I have just the thing”