The revelations unfolding from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has lifted the lid on the behaviours of corporate executives and exposed a recurring void of the concept of “putting the interests of clients first”.
In the second round of hearings focusing on financial advice, we witnessed the major banking institutions CBA, ANZ, NAB, Westpac and AMP under investigation for the conduct of their financial services arm. There were serious inadequacies brought to the spotlight, such as charging clients who had deceased for many years, charging ongoing advice fees for ‘orphaned’ clients who had no prospect of being able to get the financial advice they were paying for and the mismanagement of compliance requirements with regulators.
Hearing that criminal charges are possible for the serious breaches of misconduct gives us an idea that these large institutions have been operating far below reasonable standards.
Understandably, these reports of serious misconduct that have surfaced is a worry to clients who have sought financial advice and prospective clients who may need advice in the future. The legitimacy of providing wealth management advice under the umbrella of a bank in future is certainly to be questioned.
It is disappointing to again see financial planners being judged as a whole. A few bad apples can spoil the barrel and although we cannot change the public’s view of the financial planning industry, we want to reiterate the following;
- has no ties with any bank or institution;
- is a privately-owned business;
- do not own or manufacture investment products;
- is structured so we are able to provide advice without conflict.
Being a boutique business, we service a select group of clients for whom we can fully commit to. We subject ourselves to governance and professional audits every year and comply with all aspects of regulatory requirements. We exist to serve you, our client, and to provide the advice, guidance and management you need in order to live your ideal life (without having to worry about money).
It is disappointing (though not entirely surprising) to find that sentiment is not shared across the wider financial planning community. If the outcome from the Royal Commission is that it creates a more robust and transparent marketplace that sees all advisers acting in their client’s best interests at all times, then perhaps this is just a necessary bump along the way to becoming a profession.
How to tell if a financial adviser actually works for a bank? Search the name of the financial adviser at ASIC’s moneysmart website and if there is a bank listed next to “Controlled by”, you might want to look elsewhere.
We encourage you to contact us if you have any questions or concerns at all.