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IFA… any more comments on AMP? very quiet… seeing lots of stuff from other news platforms.. maybe went a little too hard on AMP not only to they have the most planners with very small amounts of issues compared to what is going on at the big 4
Too many overpaid executives in AMP who make decisions and then delegate – with no accountability and pass the blame down the line when things go wrong.
Seems best way to go for client is a self licenced AFSL. They have had no scrutiny so one can only assume the slate is clean in that sector.
I haven’t managed to keep track, having had back to back appointments this week, my question is did the First Choice ISA fund get grilled? They were initially mentioned, and then..nothing? Is this correct? If so, WTF is that blatant idiotic and clearly biased witch hunt RC even attempting to do and how can it have been considered balanced or in the nation’s best interests?
Planners within an industry fund [b]funny sounds like vertical integration? can they only recommend their own product? [/b] Real question is why industry funds don’t have to disclose who they pay? the companies they invest in?
Why don’t industry funds have to disclose this information like every other fund within the superannuation market?
So now we know why Dover don’t charge advisers for PI insurance , it is because the advisers get no protection , and the only PI Dover has is a solicitors indemnity.
Thanks to the IFA team for a thorough and some times amusing rolling feed. Much appreciated.
I’m an adviser licensed through AMP and would like to move to a new licensee, however, AMP own the clients under the current agreements so if I leave I lose the clients and income.
Does anyone know if recent developments put this ownership piece under question whereby I may be able to move and retain clients (like you can with every other licensee).
Has anyone else managed to successfully move away from AMP and keep their clients?
Always interesting to see comments from advisers claiming the majority of advisers are good…how the hell would you know???
The bigger question that was never asked in relation to financial advice is “what about unlicensed advice”? The RC seems to be very blinkered in its focus on licensed financial planners, as does ASIC.
But the majority of financial advice in Australia is provided by accountants, real estate agents, and financial product employees providing “general advice”. Common sense would tell you that advice which is not documented and not subject to ongoing compliance monitoring is likely to be worse. Yet this much larger and much more risky section of financial advice seems to have been completely ignored by the RC.
I agree. When are they going to look at those “advice” providers? More people have lost money in property scams but that is allowed to continue? What about advice from industry funds? They have advisers. Don’t they have a responsibility to compare? Same with accountants and SMSF. Don’t they have a responsibility to compare another fund or strategy? How can the entire problem ever be fixed if these other advice areas are overlooked? Is this coming up?
Accountants are a much more powerful lobby group, highly educated and are all round financial experts, they don’t just fill in tax returns.
This week I met with a client who’s accountant recommended (not in writing) they urgently transfer to an SMSF at the end of June 2016 with the view to setting up a LRBA. It was done urgently to save them $9K in tax which was more likely to be his advice fee for having to be licenced from 1 July 2016, They only had $125K in super and were not contributing to super regularly. They would never have been able to do a LRBA. Instead they sat in cash for 2 years earning 2% interest and going backwards due to accounting fees.. They also unintentionally lost their $1,000,000 life insurance in the rollover too. All stuff that a qualified financial planner would have had to cover and ensure was right for the client before implementing. This happens all the time with Accountants, so don’t give us the “Accountants are all round expert” rubbish.
We had an Accountant recommend an unwinding of a TTR which they then put back into another TTR so same strategy but put the super in a SMSF and charged them 9k up front and 6k ongoing (we are currently charging 1200 pa) We don’t understand how accountants get away with this shit or could even recommend that in an SOA and the clients still went! crazy…
Very concerned that Industry Super Funds weren’t examined. The number of cases of poor advice that I have heard of and seen coming from this sector is frankly scary. From blocking rollovers, declining insurance payouts and holding themselves out to provide financial advice but only providing super and insurance – why aren’t they being asked questions???
Very valid point. Maybe IFA (Aleks) can take this onboard for the next editorial?
Yep, walk into any public accounting firm today and in your annual almost compulsory 15 minute tax return meeting you can still buy a tax return, a big mack and fries, a SMSF trust deed and some tips on which of the big four banks to buy. That situation sadly, is more of a reflection of the poor state of the advice industry (the lack of professionalism and poor advice) then a negative comment towards accountants.
I have never witnessed a more over engineered debacle like this industry. Whilst the regulator gloatingly makes an example of some of the largest financial service firms in the country, it leaves the door wide open for the small operator to be crucified more extensively than the likes of AMP for simply following one impossible process: – (The expectation of managing your advisers daily is merely impossible,
I ask a question “Do you know where your wife is every day and what she is doing?” No, so how can any Administration service, commission service, compliance service have the capacity to micromanage the way the regulator expects things to be done and remotely remain profitable and meet all the proofs of their licence. – They can’t, Nor can they remotely be responsible for a fund manager imploding when the manager withholds its own IP and investment methodology close to their chests in competition with their peers.
The Industry unfortunately is an unworkable joke !!! A thesis could be written around the impossibility of meeting all the conditions of licensing, FOFA, FSR and all the overengineered bullshit thrown at the intermediary that cannot be policed!!!
Too many bloody lawyers in ASIC. Dont prioritize Audits based on Risk to public, Dont audit products. New regulator required
“She says it was junior staff that had to convince more senior staff to stop charging fees where service were not provided.”
But, but…. Isn’t experience everything and none of the ‘experienced’ advisers should ever have to study to get a decent qualification to prove their commitment or get moved on….?
What are people wanting from the RC?
Scalps? If so you would be Happy so far.
Competitors shut down? If you do your lobbying right quite likely
FPA and AFA disbanded? Replaced by what/ whom? Careful what you wish for.
ASIC given draconian powers and the budget to enforce them? Would be a radical move for any govt
All planner s to be self licensed – or approved by a professional body not ASIC. Has worked well for centuries for doctors, lawyers, accountants, engineers.
A better industry for everyone? Only if all the players want otherwise its just a bun fight.
Proactive policing of the Industry !
The RC is looking at some of the best financial planning firms now rather than the worst. Is this a valuable use of its time ?. The problem lies with ASIC s regulation of the Industry
I think this is what it should be doing. Looking at the good and bad of a range of firms.
Have seen banned advisors from the West point scandal still able to work at other AFSLs. Terrible they can continue to clip the ticket in management roles.
ASIC is getting a free ride this morning….is this RC being serious!!!
Remember they are public servants doing their best.
They are bloody lawyers with no clue !
Personally I don’t think the FPA and the AFA will exist in the future once structural recommendations are followed through with in the advice industry. Roles should not be competing for members and sanctions functions should be separate and independent.
What will those “structural recomendations” be genuis?
Hopefully that product manufacturers should not be paying fees to the FPA.
I wonder if misspelling an adviser’s name in a web site or advice document would be a breach??
Dover did a bad thing. They failed to correctly vet incoming advisers ensuring they had not been disqualified. While this shortcoming did not result in any bad advice by those affected advisers, the RC focused an incredible amount of time on this issue. Mr McMaster admitted to the problem.
I know the way Dover operates and would suggest that even before Terry’s testimony was over, the staff at Dover would have already implemented changes in processes and would have been checking new applicants, and I’d say even existing AR holders, status as advisers.
This RC should be looking at Dover carefully and rather than looking for holes, recommend to the government that every AFSL holder with an advice arm should follow Dover’s lead and have lawyers/senior advisers check every SOA before it goes to the client.
Although this would not have prevented the fraud committed by the banks it would certainly have prevented some of the other poor advice we’ve heard.
Yes, this will cost more but it will return some integrity to the advice industry and ensure that poor advice to clients will be minimised.
He basically admitted that the sole purpose of lawyer’s vetting the SoA’s is to save money on PI and not to improve the quality of advice. As counsel pointed out, Terry has previously gone on the record stating a lawyer is unable to assess the quality of advice.
Agreed. The royal commission’s questions into Dover’s Client Protection Policy provided nothing further to what has been displayed on Dover’s website for some time: https://www.dover.com.au/important-notices/
ASIC and the RC focused on a very small section of the policy rather than looking at the policy in full. When you read the policy in full, it is obvious that it provides a positive benefit in terms of informing clients about the advice process.
Millions spent on a Royal Commission and they’ve spent 2 hours, given a guy a heart attack and come to the earth shattering conclusion some advertising documentation is false and misleading by falsely stating consumers have extra protection. Penalty = not much.
Perhaps other misleading advertising could be FPA and their use of the word Professional, FPA and statements their CFP program is Masters AQF level 9 equivalent. Industry super funds and use of the word “balanced”, AMP and their lack of disclosure of the licensee in their advertising… do I need to go on?
Yeah exactly… Much bigger fish to fry. Havent ever dealt with Dover but from what I read yesterday, they seem to be better than any dealergroup I have ever been exposed to.
The Client Protection Policy used by Dover may have been poorly worded and had a clause there that it shouldn’t, but other than that, surely Dover is on the right track with their vetting of advice for the best interests duty. No other dealer group does this for every SOA and Dover is in my experience the most compliance driven group I have seen. Very disappointing to hear Dover won’t be required tomorrow as I would have liked the full story to have been told.
Watched the News, looked OK getting wheeled to the ambulance
Lessons learned from Salim Mehajer…a car accident would have looked too obvious 😉
There are news stories saying Terry McMaster collapsed during the hearing.. I hope he is okay.
Mcmaster collapsed while being grilled on witness stand, possible heart attack. Shame hes a nice guy !
According to the AFR reporting McMaster collapsed and 000 called. That’s why the stream has been cut off.
RG 90 allows so much of advice to be incorporated by reference, so wondering what the value of an SOA review is. As you would need to review the entire client file to determine if the advice is in the best interests of the client! Would therefore take longer than 23 minutes to make sure if such a determination is correct
So it takes 2 minutes for a Dover solicitor to conduct a full review of an SoA. Woweeeeee. Might need to use McMaster’s legal going forward given how quickly they get through their work.
That’s very un-solicitor like isn’t it? Most would have said “I charge for two hours” no matter how long it takes.
Anon maybe you should question your solicitor when s/he says this will be ten hours work? They undoubtedly love clients like you.
Or I can just use a good solicitor and not a box checker? If you think any solicitor worth their salt would sign off on an SoA in 10 minutes or less, you are deluded.
How long would a good solicitor take? reminds me of the old wives tale about Bart Cummings. Health Inspector “You have too many flies in this stable” Bart “How many am I meant to have”
Ok so it takes two hours to check the advice – that’s $700 minimum fee for a “good” solicitor, probably $1,000 for a bad one. Just add it to the client’s bill?
IFA blogger … does the Commission indicate whether a witness is there voluntarily or have been “ordered” to? Is there an “agenda” the Commissoner has for each witness?
Witnesses are órdered’ to appear. RC certainly has a line of questioning for each witness & are well prepared. You can call it an agenda – but so far the RC has hit their target squarely between the eyes
Why wasn’t AFA asked about Mr Henderson??
Big opportunity missed there! What’s the judging criteria??
The only people who give those awards any credence are those self indulgent enough to nominate themselves in the first place.
True!
BINGO.
It’s amazing that people can nominate themselves. It’s almost as bad as a BDM I haven’t heard from in 12 months sending an email asking for their support in their state awards.
FPA and AFA need to have fully independent conduct review commissions!
Only 18 members signed up to the FPA’s “ongoing professional fees code”!!
Looks like most advisers have concluded the FPA version is actually more complex and onerous than the ASIC one, and stayed well away from it. What an incredible waste of resources that was and continues to be. Shut it down and stop wasting members money Dante.
Yes 18. Neil Kendell and his 8 staff and the other board of directors and their planners I’m guessing. Why would you sign up to the code, where if you forgot to renew your membership or left the FPA you were immediately deemed to be in breach of the opt in rules by the Corps law. Or if you sold your business to a non member you were held to be in breach also. A con job sold. i.e “don’t worry or complain about FoFa we will look after you…being an FPA member you’ll be exempt.” sound familiar CFP exam holders?
Is it just my interpretation or is Dante throwing us under the bus?
no he is throwing the FPA under a bus…..
Why is the ifa quoting Sean Graham? If you bothered to do your investigations you’d find out he was at the helm when the CBA got their first EU. That’s what you get for lowering standards
FPA on Toast now….
Gold, absolute gold. If this royal commission had some help by people like myself who over 35 years have worked for several big firms including top banks as a planner they would discover far far more than what they unearthing.
The financial planning industry is a disaster. Full of unscrupulous thieves who charge way too much and every single firm and adviser is guilty of ripping of most of their clients.
What an a solute joke this FP industry is.
A bigger joke is the FPA and AFA thinking education standards are the be all and end all.
It has nothing to do with education you bunch of mafia pricks. God help the country with the FPA running this pirate ship of thieves.
“every single firm and adviser is guilty of ripping of most of their clients”. What sample size did you use in the research that you are basing this claim on?
A more balanced argument might also include some of the benefits you saw the honest and decent financial advisers provide to individuals in your “over 35 years” of experience in the industry.
[size=20px]35 years sucking on the tit of top banks and now you have a holier than thou attitude? where on that path did you ethically step away from the hand that[color=red][/color] fed you![/size]
I can sense that someone is incredibly angry. I’m hearing the voice of someone who was hurt by the industry but I’m telling you now, if I wanted to be involved in an industry to make quick money or rip people off I’d be spruiking bad property off the plan, selling dodgy used cars or taking commission on tickets to “get rich quick” schemes that people are dying for. I would not be working in a heavily regulated, compliance-burdened industry going through a huge market adjustment on revenue streams that requires shifting the mindset of most clientele.
I understand too, that over the course of a long period of time there have been systemic issues within the financial planning industry, riddled with conflicts and operating like a sales business rather than a profession.
All that aside, I think it’s very rich to blanket all Financial Advisers with such statements when you can’t possibly know them all, or have experienced what they do for their clients. There are 2.4 million people that access financial advice and many of those clients are extremely happy. Are you suggesting that 2.4 million people aren’t smart enough to stop paying for advice that they’re not getting any value from?
I think you need to step away and have a look at how far the industry has come, particularly in the last 5 years, in comparison to when you entered the industry in the early 80’s. The industry is crying out for experienced members of the community to help steer the current breed of Advisers in the right direction and provide support to the younger entrants. It sounds like you have the capacity to do this, with 35 years of experience in different businesses, and it would be much more productive if you took this path rather than attacked the whole industry which is trying to change.
Rather than call out people for being the ‘Mafia’ or ‘Thieves’, how about provide us some of your suggestions on how the industry can serve people better?
You are bitterly disappointed your staff member was caught impersonating a client, not the first planner to do it, nor the last…….Hillross in Brisbane are past masters at this..
What I don’t get is why impersonate the client at all? From the proceedings transcript it mentions that the adviser received a signed authority from the client to enable them to gather information on her behalf. Why not just use this authority?
I would hazard a guess than the authority was for the adviser and not the administrator. Some of the funds won’t speak to the administrators and many advisers I’ve worked with won’t speak to the fund manager. I’m not defending it all, but when the expectation is to produce an SOA in a 1 day turnaround window, I have seen paraplanners pushed to breaking point where they won’t identify themselves on a call and simply quote the member number/client name in their quest to produce work inside their KPI’s. Just a guess.
Really?! Do you mean Hillross in general or a particular business? I have a friend’s mum who is a client of Hillross Brisbane and she has been very happy so seeing your comments are concerning!
Sam Henderson reminds me of a George Costanza quote…”It’s not a lie if you believe it!”
Was the witness from FWA a shadow shopper to set up the industry. Extremely well trained and ready and leading for a set up.
What kind of tinfoil hat were you wearing when writing this??
Unlikely. This looks like an epic and unholy trinity of poor professional judgement and basic advice mistakes; Impersonating a client, inadequate research and bad/incorrect advice.
You’re an id*ot. This ‘planner of the year’ recommended in his SoA that she roll out of her SASS defined benefit scheme, even though she was still accumulating points.
Its bloody criminal.
Then to top it off, his staff impersonate her, and when she officially complains about the advice, he gets aggressive and calls her nitpicky.
FFS! A clean out in this industry is required. Bring the broom! And get rid of these bullsh*t awards that are handed out like confetti!
If ASIC was cracking down hard and listening to complaints this wouldn’t happen. This is basic cutting corners and laziness
I have a genuine question here – how are ASIC getting these complaints that are not being listened too? If FOS or CIO don’t pass these on (and I have heard of the same issue being passed over by one ombudsman several times/same adviser), and there are no direct methods on ASIC’s website to go above these organisations to complain (they just refer clients back to CIO, FOS and APRA on their complaints page), how does this information get to ASIC?
I would think clients just give up when no one is listening, and it seems as though being a whistle-blower is a pointless exercise.
Why does the Financial Adviser register show Henderson is a FPA member, if he no longer is?
How is IFA going to handle this one? Bad advice isn’t just limited to the big bad banks, and IFA posterboy Henderson is just as guilty as those Vertically integrated evil organisations.
I think we’ll do the standard Bank response. The IFA sector will make it compulsory for everyone to join the FPA and we’ll even pay for their membership and we’ll call on all planners to have degrees. Then we’ll turn around and blame individual planners. Isn’t that the standard response from the Senior Mgt within the banking sector.
Henderson Maxwell is a vertically integrated organisation. All advice providers with inhouse products are.
Is it really an in-house product though…? An MDA is just the same as recommending a direct share portfolio really which wouldn’t be considered an in house product. Id assume same investments as a direct portfolio recommendation, just easier from an admin perspective. That is assuming he doesn’t directly make any money from the in house product in the way you dont recommending direct investments.
SMSFs are an inhouse product if the admin is done internally (as in this situation, and most accounting firms). Inappropriate recommendation to switch to an SMSF was the key issue here.
You could argue that an SMA is not an inhouse product if it’s just a streamlined way to implement the planner’s advice. But many SMA’s are created at the licensee owner level, involve an additional layer of fees that go back to the licensee owner, and planners operating under that licensee are then pressured or compelled to recommend that SMA. That’s vertical integration. AMP on a smaller scale.
Advice that would have cost a client money in rolling out of a defined benefit scheme – from an independent financial adviser. But haven’t all the independent advisers on here been saying that *all* the problems in the industry are due to bank executives?? I wonder which bank executive is responsible for this independent adviser’s behaviour??
Or maybe it was those evil paraplanners that Mr Henderson was so keen to blame. Maybe the bank executives got to them too??
Yeah it’s just so much easier to blame the individual planner as opposed to Senior Management. So let’s go back to blaming planners and put Senior Mgt off the hook.
Poor advice is one matter… working in a firm aligned or owned to a product manufacturer and pretending to provide advice or thinking you are providing independent advice is a separate issue. I’ll refer you to comments on here from an AMP planner stating he is “free to use any product”
It was a deferred benefit not a defined benefit.
A range of people can be at fault for each of the issues that have been brought up. It is ignorant of anyone to think the wide range of issues in the industry are due to one group of people (advisers, executives, regulators, product providers and clients etc).
Not my understanding.
A deferred benefit means the Member has left their public sector employer and no longer accumulating in that fund. The withdrawal benefit usually equals the actual benefit.
On the other hand, a defined benefit with SASS means they are still accumulating through their public sector employer, in which case the withdrawal benefit is considerably less than the accumulated benefit.
Just my reading here, but isn’t the Henderson error hinged on the fact it was a ‘deferred scheme’, not a defined benefit scheme?
Sam Hederson’s firm is actually an independent firm is it? Just ‘non-aligned’… Isn’t that a failure in the RC itself to not identify that?
It’s an independent AFSL.
You cant use the term ‘independent’ in this case. Leave that to those who actually go out of their way to avoid conflicts of interest.
It’s neither. They have inhouse product. Like a miniature version of AMP or CBA. Same principle.
another TURD needs to get a masters and technically qualified
Just imagine what the industry funds are doing? they don’t have to disclose all their fees and charges, which companies they are invested in or compare a clients existing fund before they move them away from another provider! How can a retail super fund have one set of rules and then industry funds come under different rules and the Government are the ones making them….
they might have had some inside information 12 months before seeing industry funds have all raised their fees which include investment and insurance premiums.
[b]funny sounds like vertical integration….[/b]
Bonus reduced to $960,000?
Given the discussion on BDNs at NAB this morning, I am sure the Royal Commission would be very interested in hearing about the Commonwealth Financial Planning adviser who is guilty of the same. This Senior Financial Planner actually asked his manager to falsely witness a BDN! It was reported by his manager, but ultimately was investigated by the manager’s manager who let the adviser off with a slap on the wrist (despite evidence that this was systemic behavior). Now, why would that have happened??? Could it be that he was a prolific revenue writer with a large ongoing book??? No… surely not….
Or you could report it!
I did!
So has anyone actually stopped to appreciate that Binding Death Nominations are not valid in NSW and that they can be contested in court under notional estate provisions? Therefore there was no detriment to the client by Mr Meyn.
Did Mr Meyn know that? Or did he just get lucky? What about the 203 other NAB advisers doing the same thing?
This case study around the ‘forgeries’ in the death nomination forms shows a failure in the industry to innovate and evolve its processes rather than adviser fraud. Filling out these paper forms, its easy to miss something, finding a witness to sign the form (what do you do if you are meeting the clients at their home). Is there another industry that has more meaningless paperwork involved?
No doubt the advisers did the wrong thing here, but their intentions were in the clients’ interest. It is the process that has failed them here.
You clearly lack understanding about the seriousness of a valid binding death benefit nomination and the potential ramifications legally if it should be contested by the Trustee of the fund or the estate of the deceased. Would you also suggest that people not have their Wills witnessed? This is not just a ‘process’ – it is a legal matter and the advisers involved have shown a clear lack of consideration and concern for their clients in the interests of ‘getting the job done easily’ for themselves.
I don’t misunderstand at all. As I said the advisers did the wrong thing although they were trying to do the right thing (and avoid hassling the customers to complete more paperwork). The reality is that signatures are a weak form of control, easy to be forged. Technology could be used to A) make it easier to complete the paperwork, and B) provide tighter controls due to authentication.
“Trying to do the right thing”? – I can’t agree with you on that. They were trying to make the job easier for themselves. Possibly this is due to the excessive workloads that they need to get through, and the targets they need to meet, in which case the management at NABFP are culpable too. But I have seen this behavior firsthand, and I don’t accept your premise that this was about the client’s best interests.
He makes a good point however. Why two witnesses? Why not just the one witness, why not 3? The next thing is we’ll need to send the guy with $1,000 off to see a solicitor. I’m not condoning the practice and don’t do it myself and have to call in staff all the friggen time. I’m saying it’s a stupid process and perhaps needs to be updated and that’s what Gen Y is saying. Back to chop some more trees down and get 50 signatures for someone to make a $500 co-contribution. PS Funny how my Will,Loan documentation and accounting work also has the mysterious witness as well.
Far out mate, you need to get out of the industry, particularly as you state Gen Y, you have no excuse to have bad habits. You state that what if you are at a clients home. Well I either leave it with them to send back, invite them to my office or sometimes even take a staff member back out with me to sign,
NO it was just dumb !
Sounds like Dover is doing an outstanding job picking up all the rubbish that is coming out of bank-aligned firms and reporting this to ASIC…
Can’t get away with anything at Dover. they pre-vet all your advice and if you aren’t up to scratch you are gone and reported to ASIC.
So how is this bloke still registered with Dover then
lol yeah a “lawyer” will review your SOA… what lawyer would spend his or her day reviewing SOAs all day? There is more to being compliant that the SOA.
@the joker The whole file is reviewed actually, not just the SOA. There are many different types of lawyers and they all do different things, just because some of them check financial advice files doesn’t make them poor.
The issue is the file is reviewed before SOA is delivered – not following it – from my understanding. It’s easy to be compliant before the SOA is delivered, it’s following this that many fall into trouble.
Absolutely. But at the end of the day we are adults and should be responsible for our own actions. If not, get punished.
It’s impossible to check everything at every point in time. The cost of advice would have to rise even more…
So you are saying that checking the advice to make sure it is in the best interest before it is delivered to the client is a bad thing? Wowwwee… You cannot be serious? Preventing advice that doesn’t meet best interests is the best way of doing things. Prevention is always better than the cure.
FYI, there are also six monthly audits as well. This is by far the most compliance driven licence I have been authorised with.
A while back I changed licensees as they had been bought by an institution. When I met with the management of the outgoing licensee to let them know I was leaving, they were pleased it wasn’t Dover that I was going to. Apparently it was well known with other licensees that Dover had issues.
What issues?
It’s a case of sour grapes because no one in the industry plays with a straight bat, except Dover. Why do you think Dover is being used as a case study and not??????
Its because Dover is known in the industry as a “catchment” licensee – they take the fish (advisers) that John West rejects. Whilst to date they’ve done a good presenting themselves as doing reference checks – it has made no impact on who they recruited. Time everyone woke up to this.
AMP need to rename the “AMP University Challenge” the “Adam Palmer Advanced Diploma in Applied Finance Challenge”.
What Uni student wants to join AMP now let alone the industry? Good one AMP!
Not even that, he had…well claims to have an advanced diploma in applied science! lol
Head of Advice Compliance, AMP and knows nothing….never listened to proceedings, nor knows anything…partly explians the problem AMP have.. shakes head
Seems to be only Head of Comp since Jan 2017!!!
How can AMP keep their license for Finacial Advice when today at the Royal commission two advice items for two separate advisers so far are unremediated two years later???
Ahh shock, Jennifer Coleman is a very ‘experienced’ adviser with 27 years experience… This is why FASEA couldn’t care less about industry experience. Most of the time it is experience in providing bad advice.
Experience is everything in this game. You are picking one isolated example !
Can Orr please ask why Mr E rolled these clients into AMP products – she’s nailed the bad advice issue, but hasn’t asked why he did it… could it be because he is financially incentivised to do so?
BOLR? I suggest she’s confused and Orr of the RC needs to change the language. After all AMP don’t have clients or customers…. they only have “registers”.
AMPFP adviser here. No financial incentive to use AMP products has existed in the 8 years I have been here. I can use any APRA regulated fund in the country, 6 different insurers and over 40 lenders and can get one off approval to use non APSL products when I need to.
So why roll them over costing $25K if nothing in it for Mr E? MyNorth SuperPension PDS shows Member Advice Fees can be charged up to $5,125 + 2.51% for initial, ad-hoc, ongoing, listed plus up to 4.10% of each contribution and rollover. Do we know what Mr E was charging these clients?
It doesn’t matter what product was used, the outcome would be the same, there is no financial incentive to use an AMP product. This poor advice is not specific to any product, Mr E could have used any wrap product. It’s just poor advice.
That is hilarious. I also am part of a cult and I can choose any religion I want to as well, but I freely chose the one I’m currently in. I think you need to read your FSG a little bit closer, especially all those pages about conflicts. PS the media described you as a product salesperson, called financial planners….not my words but the journalist for the AFR.
I think you should read my response above a little bit closer.
I was a former RI Advice adviser. I found their audit and compliance processes to be quite strict. It was pretty much a franchise (McDonalds) and each business had to have the same process. However it seems it was one thing for one type of advisers and another for the businesses that they purchased or if the adviser wrote a lot of business and the latter could do anything they wanted to. This is why product and advice should be very separate and businesses such as Bridges/RI Advice should be forced to be renamed when they are owned by product providers like IOOF/ANZ. Especially since it one thing for the ordinary adviser and another for the revenue generators.
thought the same thing. There may be a strict compliance audit..but some Advisers simply choose to ignore the requirements. I think, yes Licensees should chop advisers, but its not so easy to do quickly.
Went for an interview at a RI Advice practice once, couldn’t get out the door fast enough… Practices were far from compliant but obviously they may have been an anomaly.
Why is that as a result of these types of enquiries, the outcome is just more red tape and more compliance, that ends up ultimately benefiting organizations like the the banks in the end anyway as a result of lower competition? I’m not saying this RC is bad…[b]just that Senior bank staff are committing the crime but we’re doing the time.[/b]
So far the RC has not looked at the anti competitive practices that the bank use, such as brain washing aligned advice firms into thinking they are fantastic, the buying power that forces out other competitors and gives aligned advice firms a distinct advantage. The small AMP logo advertised on page 20 of a website etc etc. The crap software that is an outcome of the majority of advisers belonging to AMP. The branding that causes clients to think they’re getting independant advice and then their “sold” an in-house product. The Un Professional Association that relies on bank payments to pay the wages of it’s $300K CEO.
Third entry on google search of Kylie Rixon
Kylie Rixon – ANZ bluenotes
https://bluenotes.anz.com/authors/k-o/kylie-rixon
“Things go wrong in business. In this day and age when that happens the news can be instantly all over social media. The community is very sensitive to corporate culture and banks in particular.”
Lol dont really have too much sympathy for bank planners but the ‘revelation’ that ANZ removed incentives tied to revenue for planners but left it in place for management is a laugh. What do you reckon management is going to push the planners to do at all costs..?
Exactly. This is the real issue. Middle managers remunerated on the basis of sales, pressuring advisers to compromise their integrity and professionalism. It is much the same issue the bank tellers union has been complaining about for years.
If the RC thinks this is a compliance or process issue, they have completely missed the point.
The bank tellers union may have been complaining on behalf of their members, but the association supposed to be representing financial planners (FPA) has said nothing about the problem of bank executives pressuring their members to act unprofessionally. Surely it couldn’t be anything to do with the FPA receiving a large chunk of their revenue from CBA? Or the FPA’s recent Chair, CEO, and Sydney Chapter President being bank executives?
Neil and Dante, now is the time to be bold. Get rid of the “Professional Partners” program. Get rid of grandfathered CFPs. Turn the FPA into a professional association.
well said
Absolutely. A grandfathered CFP once couldn’t explain the difference between a concessional and non-concessional contribution. It was at that moment that I swore never to do the CFP and be in the same category.
Lol mate exactly the same but TTR vs Account Based Pension. Ill look at completely the CFP I have many exemptions for once they move on those who didnt earn it, many of whom are the worst planners out there.
RC is asking all the right questions to highlight the problems and make recommendations. Hopefully they will create an independent body to take control of financial planning from ASIC ,who have proved inadequate in this area, and regulate individual planners and institutions to get the profession on a proper footing.
Why are ASIC accepting re registration of advisers when they have had issues reported them by previous licencees about an adviser? Why are they not sharing this information with the new licencee? ASIC needs to accept some responsibility and be asked why this could happen? Perhaps these questions and more can asked next week when ASIC are in stand.
ASIC needs to get out of financial planning and a specialist Government body set up to licence individual advisers and hear complaints and discipline or ban them
A reminder to all the Licensee CEOs. The standard one walks past, is the standard one accepts.
Unsure of the strategy to keep brining up Dover. Are they trying to highlight the lack of transparency of sharing references between groups or do they have something else for Dover? I note that Dover are appearing at the RC soon…
is the ClayTon Utz / AMP Report publicly available??
Dover being used as an example of adviser reference checking….Please! They may have performed the bare minimum of a process, and certainly didn’t act on negative findings.
Shock me, another ‘experienced’ adviser with only DFP & FPA membership causing the issues.
Education isn’t everything but it would rid the industry of these guys…
Problem is they’ll just fudge their way through the bridging courses and remain in the industry.
Yeah, thats why the exam needs to be in a classroom, technical and closed book so they cant just get their paraplanner to do it.
The current education standard for financial planners/advisors appears to be too low.
Sorry are we missing something here
Since when has it been ok for all the CEOs to hide behind excuses for not attending the
RC
Cmon enough is enough ask for the leader not their lamb to slaughter head of advice
The CEO should not be hiding
So Mr Wright, does not believe in insurance commissions but was the only one with only one insurance option on the APL and the last to move on commissions.
Ok, Mr Wright. or is it Mr Fibber
So the planner will not be receiving these bad commissions, but as a charity Westpac will continue to receive these bad commissions
Maybe some time in the big house will help jolt the memory of some of the executives. It will be good too see if some whistleblower protection as I am sure many staff were sacked or counseled out of jobs and made to leave while working under these conditions.
Maybe this will help them impose the penalties
however, even though the phrase “largest fine ever” will find its way into headlines about the settlement (yes, it’ll be the largest fine ever levied by the agency in its six years of existence but nowhere near the $14 billion slapped on Deutsche Bank by the Department of Justice), a $1 billion fine for Wells, which we doubt will be all cash, is still little more than a slap on the wrist.
In a comical twist, the CFPB’s previous “largest fine ever” was ALSO levied against Wells back in 2016. The price tag? $185 million.
And it won’t be the first – or even the first this year: The Federal Reserve in February barred the bank from growing beyond $1.95 trillion in assets. Fortunately, Wells has seen its once industry-leading portfolio of mortgage loans decline year-over-year, so the probability of it getting caught in further malfeasance is somewhat limited.
I think we all need to be careful in the handling of this as there is a planner who has been dealt with on a major stage today. His managers, the complaints process, senior management has not been named and shamed. He deserved to be punished for his poor advice, but the public humiliation is not warranted.
Again the corporate is allowed to escape with minimal punishment, where the individual has been severely tarnished. I just dont understand why a complaints department would not have made good. Mr Hartzer is quoted as saying that Westpac makes good when they have done the wrong thing, and this clearly shows the rhetoric in his statements.
The punishment hasn’t even been dolled out yet so you are speaking prematurely.
I have zero sympathy for the adviser named yesterday. His utter incompetency led to that client having to alter their entire life because he didn’t know some of the very basics of investing in a SMSF. Usually I hear woe is me stories from clients and tend to think they brought at least some of it on themselves, but that poor couple put their trust in a professional and he ruined them. He should be out of this industry in a heartbeat.
So too should his manager, and the complaints manager.
This has failed on a number of levels.
I love you Kenneth!
Westpac have closed their growth engine (direct advice) this week, as there were too many issues.
People can what they like about the Royal Commission but the spotlight will clean up the mess the big institutions have created.
Maybe had the clients in this case received a reasonable compensation package their life would not be hell. Given the spend on lawyers, i am sure they could have put a decent deposit on a house just on the legal bill dealing with their case.
They didn’t use lawyers – they went through ombudsman. They stated in questioning that they didn’t have the money to engage lawyers.
Westpac paid more for lawyers than they offered in compo
To be honest doesn’t sounds like they had been making very good financial decisions before they went to the planner, up to their eyeballs in debt, they came to the planner wanting to use their super to purchase property with such a low balance… bad Idea… how old was she??? How the hell was she going to pay all that debt off before retirement???
The poor bloke has made a mistake, should have never taken these clients on. People need to understand that the banks work planners so so hard with 0 support so hopefully they look into the support and the amount of hours expected from planners and the expectation from the management of banks. They use and abuse their planners and banker staff, I just hope they look a bit further up the line. Most issues in any company or government are caused or come from the top.
Crocodile tears from the client- why couldn’t they buy another house the same area? she had cleared large amounts of debt. They had been given everything back charged, sounds like she was trying to take the bank for a ride at the end.
^ Classic adviser mentality. The uneducated, inexperienced client putting their trust in a professional is the one to blame – not the adviser who promised what he couldn’t deliver. I mean what kind of adviser doesn’t bloody know you can’t buy property you will live in within a SMSF??
And once again blaming the bank not the adviser. This exact behaviour happens ACROSS.THE.BOARD – in bank firms, dealer group firms, independent AFSL firms.
‘This poor bloke makes a mistake’ – a mistake???? Not knowing some of the most basic fundamentals of a SMSF but deciding to give advice on it is not a mistake – it is absolute negligence.
Yep that’s right. A capable Adviser would probably not give advice to these clients based on the stated goal of buying a B&B as that sounded like a really bad idea from the get go (based on their Objectives,Situation & Needs). A skilled Adviser would have explained WHY the B&B was likely a bad idea and that a SMSF is not for everyone. However it sounds like this guy had a budget to meet.
could not agree more – this is the most basic principle of having an SMSF. how is he still an adviser? and their 30 point system for audit is an absolute joke….
Wow!. Its up to planners to direct new clients, especially inexperienced ones. A professional adviser would have known the SMSF rules, charged a fee and gently guided them in the unlikely success of their venture. Instead he looked for every short term opportunity to upsell. We are judged as much by the clients we turn away as the ones we take on.
The next time you complain that Australian’s don’t trust or respect financial planners; come back to this comment and remind yourself that this attitude is the real reason for so much mistrust and contempt.
[i]Wright unsure whether Mr Mahadevan was a member of the FPA at the time, but suspects the move to have all salaried advisers join the association around that time.
If he was a member, Westpac would not have reported it to the FPA.[/i]
[b]When will the FPA get rid of the professional Partner program? [/b]
According to Adviser Ratings, Mahadevan has a 75% rating and a silver rating…….would love to see what the bronze rating looks like.
Its amazing that none of the supervisors have any responsibility for their planners.
it’s amazing that planners feel they have no responsibility over their own actions…
Yeah, ’cause all the Soldiers have so much say in how the war is fought of course.
Yes it’s all planners fault. For the very first time in my 20 years as being an adviser the spotlight is being caste on Senior Mgt…for the first time ever… I’ve had 20 years of CBA/ANZ etc etc the senior mgt casting aspersions on my chosen career, blaming planners as using them as scape goats. I’ve seen 5 advice businesses close down due to over regulation and good people turned away from advice. I’m pretty confident Australians are happy to see Senior Management get some flack….for the first time.
You can always walk away, change employer/career etc. like a lot of others have done. No one can force you to stay.
^ Oh look, more advisers who think they have no role to play…in the provision of financial advice. Hilarious. If the banks were making you do things you felt were unethical maybe seek a new employer? Hard to say no when the large bonus cheques are coming in though 🙄
Hard to say no when jobs are scarce and you’re the breadwinner for your family….
Ripping customers off isnt a job, it’s a crime.
The core of the problem here is that the “best interest duty” is a legislated obligation for ADVISERS – it is not an obligation of the product or platform providers. An example of this is when a platform provider like AMP introduces a “new” platform like say iAccess to North or North to MyNorth which essentially have the same features but just represent a reduction in fees (change of colour coding from red to green). They do not automatically apply the new fee structure to all existing clients which they would clearly have to do if they were operating in the client’s best interest. So the poor adviser in the AMP network (get out now) has to produce an SOA to “move” to the “new” platform for virtually every client if they want to meet their obligations. The corporate entity under which you are employed is actually making it harder to meet the best interest duty because their obligation is to the shareholder and not to the client. And that is the vertical integration conflict in a nutshell.
It’s an obligation on the advice provider – so it is an obligation on the licensee more than it is the adviser when dealing with the AMPs of the world.
Anyone else see a problem with the amount of premium being charged from the insurance companies? clients that need cover can’t get it cause the costs are far too high. this is out of the planner hands we can only go to the quoting software and see the premium the companies give us yet insurance companies make 100millions of dollars profit just the same way as general insurance companies do.
Everything starting to look and sounds like the old days when the government knew that most people wouldn’t live to the pension age set… so not much was paid out. Watch the age pension increase in the following years and its already happening imputation credits being looked at (Double taxed) oh not to mention the TTR 01 July 2017 change to the earning tax being turned back on this pool of super money…. Government can’t manage the country so we need to tax more and more….
Real-estate agents – 15% charge to manage your renters buy and sell properties with hardly no regulations…
Accountants – let me setup a SMSF for you plus auditing costs and for box checking information they already have from the government systems…. same issues occurring in USA right now
Lawyers – let me charge so insurance claims advice financial planners do for free currently….
Lawyers – let me charge for conveyancing that anyone can do if they know how to look things up where is the government intervention.
Government – Don’t see politicians going to jail or getting Royal commissions on wasted public money… lets sell all our utilities companies and make them private and now watching the cost of living going up and up not to mention going after mum and dads for tax and big companies exempt
That’s one way to look at it.
The other is that they are doing their job by enhancing their product offering, and but you don’t seem to want to do your job of [u][u]advising[/u] your client[/u].
NAILED IT!
Is this adviser still practicing? and a CFP? WHY??
Because a CFP is *not* a silver bullet. Advisers with degrees, without degrees, with CFP, without CFP, experienced, inexperienced can stuff it up. There is no way of guaranteeing the adviser you go and see is going to get the job done – much like any professional it is sadly a crap shoot. There are bad accountants, bad lawyers etc. Advisers are not immune to clowns in the ranks.
I agree with you, but this Adviser was in my business giving such inapproriate advice I would be auditing every file and making sure they left the industry…..
Wrong. You know that the FPA gets money from Westpac. You know the FPA hides in member fees in their annual report. You’re complicit with this arraignment and are happy for the FPA to get money from Westpac and for Westpac to influence their policy via the professional partner program so you are therefore (if a FPA member) no better than the adviser in question.
Yes he still works for Westpac and is a CFP. According to the adviser register he has “no banning or disqualifications recorded”. Nice
So they are now trusting him to provide ongoing advice
Excellent effort
The FPA would rather get the dollars from Westpac, via the professional partner program, than appear to be acting for advisers or Australians…simple. FPA members are happy for this arrangement.
unbelievable. the guy just doesn’t know his stuff so a higher education requirement will help weed out turds like him who give advisers a bad name
this guy is plain and simple a turd
these poor clients are homeless and the turd still enjoys free reign
god help his clients
He has the higher education..thats the point most banks have paid for their advisers to get educated…but you cannot educate ethics when teh sales culture is strong..wonder how many up the chain in Westpac got a clip of his the business he writes???
But clearly didn’t know enough about SMSF rules to seek an ATO ruling before setting one up. But that would have entailed charging a FFS not going after the low hanging fruit of risk and loan commissions.
Old mate really showing the value of a grandfathered CFP haha. Cant make this stuff up, FPA really gouging their fees on this one.
Got his CFP in 2014 on the FAR website so not a grandfathered CFP but a newly designated CFP.
Because Westpac bank paid for his bloody membership for Christ Sake. It’s called the professional partner program.
and so too is the lender
The case studies are due next. We now will see the personal impact of poor advice
But Bruce, have you not read the comments from advisers here the last few days? It’s not the advisers fault for the poor advice. It is ASIC’s fault, the ATO’s fault, management’s fault, FASEA’s fault, TASA’s fault. Poor advice can’t possibly be the fault of the person giving the advice…
Well that’s glib. If you have not worked for Bank Executives like this you will never know what some very serious issues like Client SOW (Share of Wallet) benchmarks are. Yes there a still some not very good Advisers, but in these Institutions we have systematic problems with advice quality.
Systemic problems regarding advice quality exist across the industry, in dealer groups, in self licensed firms, in banks, in super funds. No section is immune.
Give an example of a systematic (not specific) advice quality issue across self licensed firms only then please.
How many do you want? Every client who walked in the door getting recommended an LRBA, despite their personal ability to be Trustees of a SMSF. Multiple firms where there are ‘preferred’ products that will get recommended because the BDMs are chummy with the directors as opposed to the product being the best outcome for the adviser. Clients being charged volume based ongoing advice fees (the EXACT same thing as commissions but with another name) where the fees recouped are defined by the client’s portfolio not the work being done for them. The exact same issues you find across the banks and dealer groups can be found in NUMEROUS self-licensed firms. Not all, but still plenty. It is shameful to pretend that this only occurs at the big end of town.
Based on what? That’s just a ludicrous generalisation.
One can always walk away, change employer/careers. No employer can force one to stay. It’s a free country.
The ‘fault’ of these bank advisers is a) not understanding the long term impact to their clients, b) not understanding the long term career impact of providing poor advice, c) caving in to the ‘path of least resistance’ in a world where they are offered very little support and a great deal of pressure is applied to them daily on meeting targets which benefit the bank (not its customers). Do they exercise bad judgement? Yes. But is it somewhat understandable? Yes, I think that unless you are completely heartless, it is somewhat understandable. Until you have walked a mile in their shoes as they say…. IMO, the fault still lies with bank culture…
Culture is formed by everyone in it. Including the ones who are seeming powerless to change the culture but yet feeding it.
Don’t Forget Total Financial Solutions Australia – TFSA wholly owned subsidary of Countplus……recently released from an EU…
While I am not a defender of vertical integration, the RC is not going to be good for advisers or licensees. They are raking through issues that have been raised and addressed through FOFA and LIF, but no doubt will lead to another round of expensive regulation that will further increase the cost of providing advice to the retail consumer.
Being cross-examined by a professional litigator would make anyone look bad and not immediately having answers to minutes of a meeting you weren’t in, in 2013 is not surprising.
For anyone who has been involved in the advice ‘transformation’ since 2007 you would understand that it is easy to understand why it took 2yrs for the CBA to implement change. Firstly you have months of discussion with ASIC, then you provide an EU which sets out the steps you will take. ASIC will demand an independent group like Ernest and Young (EY) or Clayton Utz come in who then do three months of meetings to provide a ‘Scope of Project’ piece. You then design the project, get Board sign off and go back to ASIC (by now a different team as the first team has left to work for EY) to get sign off. After re-briefing ASIC and bringing them up to speed they then demand changes (even though the original ASIC team is now on the EY side of the table). You re-scope, Board sign off again, and then represent to ASIC who might agree the project scope but then want an independent review by a third party to have oversight. Finally, you get to implementing the project – meetings with all teams, reviewing every process, adapting to new regulation (which has changed since to wrote the original scope document). You then have half the team working on the project while the other half try to manage business as usual. (and yes when you next meet with ASIC the team will have changed again and will be angry about lack of progress)
The problem is that you are 12 months in and nothing has actually been changed. You still need to introduce the new processes, retrain all parts of the stakeholder chain and rewrite the technology managing the business.
I am not defending CBA, just pointing out that expecting a business like theirs to totally re-engineer in three months is naive and simplistic. The result would be a bandage that quickly deteriorated and yes, consumer outcomes would be even worse.
Not to mention internal politics to determine who’s accountable for what, there is never going to be enough time in the world to get anything done.
Aleks, no need to get personal attacking these people with memes and gifs. The evidence being given speaks volumes for itself. Stay classy.
unfortunately big insto leadership is full of nice people
ATO is giving personal ruling to buy the property in India. So many companies/financial advisors advertising as well as holding seminars that the SMSF can buy the property in India. The true fact is no foreigner or foreign entity can buy the property in India. This mean all the SMSF who have invested in India are non-compliant SMSF. There should be action against all these involved as well as against the auditor who audited that SMSF
In my opinion ASIC, ATO are the main culprit for this state of affair of the economy
Sure, and by that same extraordinary logic, the Police are to blame for all crime committed.
[quote=Anonymous]Spare me. The IFA space is full of the exact same issues. Even if there is no vertical alignment in a self licensed firm there are still ‘preferred’ providers who clients end up being placed with, particularly if they were in a product where you couldn’t charge commissions… I mean ‘ongoing advice fees’ to. The vast majority of advisers place their revenue ahead of the client outcome, anyone who thinks otherwise is kidding themselves. [/quote] Well guess what buddy…I ain’t one of those advisers! Never have been in the 10 years I’ve advised. AMP used to provide the highest upfront commission for insurance. I’ve never even had one of their an PDS’s in my filing cabinet. Overpriced and average quality – that’s not what any of my clients get advice to implement.
Aleks, you are a vile Human being. You espouse to be a professional journalist yet you post online bullying Memes around people. You are pushing the boundaries around the mental health of these people. Take a look at yourself, you don’t see Amanda Drury, Alan Kohler or others running with this childish behaviour. ****** now comes the comments from the haters*****
you are funny
Much as I am rejoicing at the level of disclosure now occurring, I did feel sorry for Marianne (and yes some of the Memes were a bit mean Alek). I could defend my advice services on any client but to defend it on behalf of a usually faceless institution…
More than mean. They were inappropriate and poor journalism. Marianne has championed best client interest her whole career and worked hard to break sales culture and lift the education qualifications of financial advisers under her management. She’s done an amazing job cleaning up the mess left by CBA predecessors. IFA magazine probably biting back after all the years Count refused advertising sponsorship and dollars when they were still considered an IFA.
Yes where is Tim Gunning former head of CBA FP? Ord Minett. They just move deckchairs with no adverse consequences, actually promotions !
I think one of the points maybe Marianne was the Exec at Count and she may have contributed to the culture and was hired by CBA for the Exec job because she fits in at the Exec level. She maybe what CBA Wealth Advice wanted to bolster the existing culture rather than changing it. We just don’t know. Just have to be patient and wait to see what the RC will continue to uncover.
Are you Marianne?
Marianne, is that you?
Don’t feel bad Aleks, I’m sure your equally self righteous mates at XY Adviser will still back you up…
I’m so pleased that for once the big 5, or who I like to refer to as “the fools in suits brigade” can’t hide behind politicians, Government, ASIC etc where they have been playing the “look over there” game. They collectively and continually convince Government that advisers who are the problem not banks or big institutions
This time round there is no one else to blame but themselves #happydays
Good to see James – given how well you handled the Aus cricket team culture
Bahahahahaha…
Advisers are still part of the problem. Can’t believe that advisers even begin to pretend they aren’t.
Care to elaborate rather than making unsubstantiated accusations?
Nothing unsubstantiated. Was, until very recently, in the advice industry for 25 years. If you think advisers aren’t part of the problem then I admire your sheer ignorance.
Please explain Pauline. Which advisers? All, or advisers subject to a Royal Commission. The days of 4% entry fees from super to pension, percentage based advice fees, BOLR, and a lot of behaviour pre 2012 has changed.
Are you saying ALL advisers are part of the problem or some? Is it also true that some advisers AREN’T part of the problem?
Spot on! Get any reply? I doubt it…..
You ever given advice James???
Marianne Perkovic- lovely lady and good operator.
pfffttt no clue!
still believe this is the case?
If ASIC were handing out Gold Medals for charging feees for no service, CBA would be the gold medalist…GOLD
I this the Legal counsel for AMP should appear..seems he has his finger in everything..
AMP and Others will look like a showbag. Looks great when you first buy, great promises take it home and empty it out and find it is full of $rap
So have we learned anything new that we didnt know today about the 4 and AMP? Not really.
What I want to know is, the RC/ASIC are coming out with a sledgehammer, what are they going to do to protect the GOOD IFA space that hasnt had any of these issues to move forward? We must be vary cautious of unintended consequences as an industry.
Spare me. The IFA space is full of the exact same issues. Even if there is no vertical alignment in a self licensed firm there are still ‘preferred’ providers who clients end up being placed with, particularly if they were in a product where you couldn’t charge commissions… I mean ‘ongoing advice fees’ to. The vast majority of advisers place their revenue ahead of the client outcome, anyone who thinks otherwise is kidding themselves.
I don’t agree. I have access to a ‘badged’ product in my IFA firm – it doesn’t get recommended unless it meets the client’s needs and is in their best interests. Most of my clients are in a product wholly unrelated to me in any way. I have sometimes moved clients into products where a fee can be charged, but only if it is demonstrably going to be better for them to receive ongoing advice. I have charged clients directly for ongoing service where the existing product was suitable for them but didn’t allow fees. I have declined to provide advice to clients many times where I felt the benefits of advice would not justify the costs of advice.
Shock horrow. Consumer walks into AMP Firm looking for advice and gets sold AMP product. At the end of the day AMP advisers are selling a product and using advice as a sales tool where necessary. We do need firms like AMP where you can walk in a buy a product, but what should be looked at by the RC is how an attempt to regulate this sector and provide better consumer outcomes has caused over regulation, red tape, and this when combined with a lack of proper industry representation from industries bodies (FPA) has killed independent advice in Australia. We need a strong and a balanced independent advice sector. Not red tape and certainly not more regulations placed on AMP advisers that ultimately impacts all.
Shock horror, client walks in and receives a product based on what’s best for the adviser (higher BOLR) rather than what’s best for the client.
I’m going to walk into Coles and start asking for Woolworths branded products hey… same same but different
Big difference between a packet of chips and someone’s retirement savings there champ – classic adviser logic at play.
A stupid analogy but… with Advice, people are walking into a Coles owned store with the name of the business changed to something else…say Retireinvest, Charter, Hillross thinking they’ll have a choice of Pineapple but are only sold the cheap Thai Coles branded product. If you walk into AMP and walk out with an AMP product fair enough but don’t expect conflict fee “advice”.
Guess your points above ^^^ work the same for when you talk to SunSuper and QSuper who until recently gave no choice of any other fund but them and with no comparison at all yeah sure they have all the clients best interest too. same same but different. The point above was to say the banks shouldn’t have to sell other products they are a business such a stupid term Conflicted fee. no business is not there not to make a profit lol I can tell you now industry funds are not getting free tv ads every week.
I’m a member of the public and it seems these firms, like AMP, all have one thing in common. They are all members of the FPA and pay member fees as part of something called the professional partner program. I’m wondering if I should exclude all FPA members from my search for an advisor. After all, you are all members. Do all members make false statements to the RC? I would welcome others thoughts on my quest for advice. Thank you…Mrs Concerned Australian Public member
Mrs Concerned Australian Public Member,
Unfortunately we have TASA which forces us to be a member of an association. At this point in time we have the FPA or the AFA. Both as useless as each other. Believe me when I say we spend good money on rubbish.
TASA only ‘forces’ you to be a member of an association if you haven’t done the relevant educational courses that TASA requires you to do. Feel free to improve your education if you don’t want to be a member any more.
And how are you going to satisfy FASEA’s requirements going forward? It wont matter how many relevant degrees you have. No doubt TASA will change its requirements to match FASEA then too. Enjoy being taken for a ride.
Member of the public. There are excellent members of the FPA – there are advisers I wouldn’t trust to look after my dog who are members of the FPA. Sadly an association membership tells you absolutely nothing about how good, bad, lazy or incompetent that adviser is. Sadly it is a gamble.
Salty adviser. There are other bodies you can join outside the FPA or AFA for TASA purposes. Maybe do some reading next time you renew?
How IOOF have escaped all of this so far is beyond me… are they scheduled to appear at all?
And for our next chapter, AMP meet Shareholder Class Action.
Yep suing a company in which you have shares is a brilliant idea – or you could just send a big cheque to some lawyers and save a lot of time.
Are we seeing a changing of the guard? The findings of the RC will not create a profession, however it maybe an incremental step in the right direction.
Jack’s earning his $3 million salary this week
What surprises is how the auditors did not review check or qualify the annual statements and filings. Must be a good auditor.
Wouldn’t have a job if they did the right checks Id say. Just like the internal compliance department.
Are they going to get onto real advice issues some time of just focus on BOLR. Whilst there are issues there are bigger matters as well
I agree that there are many bigger issues that should be addressed, but perhaps the initial goal here is to highlight the culture that exists within senior management at AMP.
AMPs bureaucracy makes a public service department look like a kindergarten. The real story from these two days at the RC is that ASIC was so concerned drafting incomprehensible SOAs, and rifling through the ex-Guardian advisers advice files to manufacture the allegations of Report 413, that they had no time to go looking for a fees fiasco in the Big Five. Some of these “fees -for-no advice” came from super accumulation in platforms, denuding the balances, just as it said in 413. Where were Mr Kells 60 employees/investigators – down at the Melbourne club, hob-knobing with all the Big Five execs. I can just hear the gossip at the ASIC tea trolley- “we don’t need to check-out what is happening at the Big Five- we can trust them, they will always notify breaches, unlike those sleazy self-employed advisers in smaller AFSLs”
I’ve only very recently joined the industry, and the casual admissions/widely known “revelations” that have come to light in these [b]first 2 days[/b] are sickening. The ‘orphan clients’ bobbing around in the ‘BOLR pool’ are hardworking mums, dads, grandparents etc. all of whom are seeing their retirement funds being diminished & their future jeopardised. They trust advisers and are far too often betrayed – and good God, that is so, so sad.
To those advisers complaining “we are being unfairly targeted” … [u]How?[/u] If the actions of AMP & their employees/authorised reps (and undoubtedly we’ll hear of other organisations’ horrendous tactics as the RC progresses) don’t justify this Royal Commission, then what will?
When i first heard of the Royal Commission, I thought to myself “oh hey, that seems a little unfair.” But after this.. bring out the gallows & guillotines. What a dark, shameful era.
Hodge v Reagan http://newmediarockstars.com/wp-content/uploads/2015/06/trex.gif
This is hilarious.
We can’t sack the adviser because he or she simply sold the business back to AMP in good faith.
The audacity of the regulator to call a senior manager to task on poor behaviour…LOL LOL !!!
Big 4 banks laughing all the way to each other right now. A banking royal commission with it’s focus on another AFSL & their favorite whipping boy Financial planners. Well played Big 4 Well played.
Dean Sanders FOR AMP CEO…he’ll clean them up…LOL..
financial services = what a F**g mess….!!
If anyone in this conversation knows Jack regan they would say he is a decent human being – he has been thrown under a bus. he has been in this job for a short time and is paying for the sins of the past management. Funny who MD Craig Meller elected not to appear and he was there all the way along
Totally agree. I’ve worked with him and he is a good person who I’ve personally witnessed time and time again him defending hard for a clients right to be treated ethically and appropriately when an adviser didn’t do the right thing by them (either deliberately or inadvertently).
Oh dear, “the profession”. The profession of course does not apply to the providers of products.
MYOB and Xero are great products, but not the accountants main game.
Thirty years ago, the humble life insurance agent wanted a better title, so financial advisor was born.
It was all so easy when the insurers logo was on your card, and you provided life and super to the client.
All the egos, pretense and fancy titles have actually ruined the industry.
Mr Regan it the face of AMPs, incompetence, greed etc There are plenty of people in that organisation that need to go. Rotten to the core – cant see AMP coming back from this one
The problem is clear, there are too many fat cats and bureaucrats clipping the ticket in this chain, the only two people with the most relevance here are the client and the planner.
However, ASIC, FASEA and the compliance etc… all just add costs to the planner to comply where the issue is systemic with Vertically integrated institutions that are sales orientated and dealer groups that hold the axe on planners heads as they are their authorised representatives.
As a self employed planner, I have seen my PI double, excess double and costs increase because of the above, really hope that this royal commission will change some of this otherwise it will be a shame for all Australians.
Yes – there are no bad advisers out there at all – just evil politicians and fat cats. Pull the other one…
There are bad advisers, no doubt, however the system forces them to be sales people in particular if they are employed by such organisations.
Please don’t tell me that there are no fat cats, perhaps you are one of those!! Living off the planners 😉
The system doesn’t force them to do anything. They choose to be this way. Stop blaming everyone else for the poor decisions you choose to make.
And I am long removed from the industry the past 12 months – but what I saw the previous 20 showed that the advisers weren’t innocent pawns here. I had many advisers tell me all about the ‘good old days’ over drinks – and they certainly weren’t talking about it shamefully.
Budgets, bullying and Performance Management of Advisers exists but not “the system”?
if you want to keep apportioning blame to EVERY.OTHER.SECTION of the business except advisers then be my guest. I wonder why independent advisers make the same self interested moves as aligned advisers?? They aren’t being ‘bullied’ by middle management – they are their own bosses. Keep pretending that advisers aren’t part of the problem and watch the industry continue to be as respected as car salesman.
Licensing conditions and a EU coming to AMP?
This is disgusting, nothing short of jail terms for those involved, AMP should hand back their licence
It’s Clear to me Mr Reagan needs a seeing eye dog….seems blind to everything..lol
Regan right now – [url=http://]https://vignette.wikia.nocookie.net/jurrassic-wolrd/images/3/3b/Tumblr_lzgcxnNjUg1rpdvglo1_500.gif/revision/latest?cb=20151022170004[/url]
Read a comment yesterday Aleks that rings very true and a question for you
Given the RC comments yesterday in fee for no service do the support staff and leadership of these companies have the skill set to set up compliance and supervision monitoring frameworks
I had a look at the quals of the leadership and support staff in a few companies and it’s a case of the blind leading the blind
FASEA for management!!
Anyone in the industry who was not blind can see the findings of the royal commission have been happening for as far as I can remember, in particular AMP, one of the worst. Closed shop and commission culture imbedded into its heart. Buy a orphan list and do not service them, in particular if there are Pre FOFA grandfathered trails in there!! Blatant stuff, any one that cannot see that vertically integrated organisations are prone to this kind of behavior is blind. They have to as they want to hold on to the product, could not care less about advisers. In fact good advisers are a threat, as they will switch them out of these crappy products, that that from me “Commissioner”
Yeah exactly. The fact that the regulator is acting surprised these things have been happening at AMP is the most concerning part. I know plenty of people both internal and external have raised these very issues many times over. They are the worst of the worst.
Agree Regulator is just as responsible for not identifying issues (or turning a blind eye to large licence holders).
Yep. Seems like BOLR may be illegal. If not illegal it might be viewed as unethical at the least. Inflates the value of FP businesses
Not sure that BOLR is illegal, where the problem lies is that once sold into the BOLR pool, then client cannot be charged as no one is providing advice
There are plenty of non aligned advisers sitting on clients in commission based products. Do they service them all? Please.
No they don’t and they should be hung out to dry too. Opt in shouldn’t have been grandfathered if we really want to get real. Opt in is not a chore if you actually service your clients and meet with them at least annually… You know, doing your job as an adviser.
It is superfluous Clients could always opt out at any time. More FOFA Shorten Bullshit !
Yes at least 20 years while I have been a planner.
9/10 pieces of advice relating to the establishment of SMSF’s are inappropriate.
Good lord.
Surprised there was 1 that was appropriate to be honest.
Will accountants be looked at for “advising” on the establishment of SMSFs? especially ones with less than $50,000?
All the while government is now starting to provide banking services to the public as well guess they will come under different rules just like their mates at industry funds who don’t have to even disclose one investment they make because they are “non for profit”
Let’s hope they hold those at the top accountable for any wrongdoing
This should be good! Hopefully FASEA can be a matter of discussion !
Thanks Alex…I ‘ll check in for your insightful update as often as possible. Also great way to go back over each days events for reminders
popcorn at the ready!