Questions raised about ‘systemic bias towards in-house products’ at institutional licensees (in CBA Bank and AMP). As Aleks Vickovich (ifa.com.au) reports, whistleblowers have been lifting the lid on sales incentives in the current Senate inquiry.
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‘According to Mr Morris, the culture of bonuses within vertically integrated businesses is a far greater problem than pre-FOFA product commissions due to the “cascading effect” right up the chain to senior wealth management executives. “[Commonwealth FP’s] remuneration model has changed, but it only has a ‘reduced emphasis’ [on sales],” Mr Morris told the inquiry, paraphrasing from the Commonwealth Bank’s submission’.
‘”Given that many of these AFSL holders are owned and operated by institutions that supply the financial products recommended to retail advice clients, AFSL holders develop APLs which virtually exclude all other products from providers who compete with their parent company,” Mr Wood wrote. “As a result of the systemic bias within the AFSL holder organisations, clients are not recommended to use alternative financial products provided by a competitor of the AFSL holder’s parent company regardless of any superior ability to meet the client’s needs.”’
There is some good information about financial advice and how to look for a Financial Planner on the ‘MoneySmart’ website:
www.moneysmart.gov.au/investing/financial-advice/do-you-need-advice
