Aligned advisers still back in-house products


By Julie May

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Over the past four years financial planning groups under AMP, ANZ, Commonwealth Bank of Australia (CBA), National Australia Bank (NAB) and Westpac have “consistently” allocated around 75 per cent of their clients’ superannuation products to an aligned funds management group.

But the “Roy Morgan - Superannuation and Wealth Management in Australia” report, released last week, noted that a proportion of funds in these products were master trust or wrap accounts, which were likely to include funds controlled by external managers.

In the 12 months to December 2014, Westpac/BT had the highest proportion of members directed to their own products on 82.4 per cent, up from 79 per cent over the year, followed by CBA with 71.3 per cent, up from 64.2 per cent in the same period.

Not far behind were NAB at 68.8 per cent, down from 70.6 per cent, AMP at 68.4 per cent, down from 68.9 per cent, and ANZ at a much lower 47 per cent, but up from 44.5 per cent.

“It remains to be seen whether the Future of Financial Advice (FOFA) legislation will have any impact on these numbers, as the large licensee groups are generally restricted to recommending funds from their approved product lists,” the report said.

“This issue has attracted a lot of interest in past editions of this report, and with increased government focus on the fiduciary responsibility of planners, it is likely to receive increased attention in future.”

The research also highlighted the continuing dearth of knowledge in the market on what constituted an “independent financial adviser”, and Roy Morgan highlighted this might in part explain the lack of trust in the profession.

“A survey conducted in April 2015 showed that only 24 per cent of the population rated financial planners as either “very high” or “high” for ethics and honesty,” the report said.

Consumers largely viewed the major licensee groups owned by the financial planning giants but branded differently from the parent company as independent, despite their ownership.

The report said 54 per cent viewed CBA-owned Financial Wisdom as independent, 51 per cent for NAB-owned Godfrey Pembroke and 46 per cent for ANZ-owned RI Advice Group.

“It is interesting to note, however, that even when the planner comes from a major fund manager, there is confusion over the issue of independence, with over a quarter of AMP members (27 per cent) considering them to be independent,” the report said.

In the case of planners from the major banks, the position appears less confusing, as only a very small proportion considered them to be independent.

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