Statistics published by Roy Morgan show that consumers perceive financial planners branded differently from their actual owners as far more independent than they rank bank-branded financial planners.
All the big four bank’s financial planners rank low for perceived independence by consumers, as Roy Morgan says “the planners belonging to all the major banks and labelled as such are generally understood to be ‘tied’ rather than ‘independent’”:
- CBA 14%
- ANZ 13%
- NAB 12%
- Westpac 11%
- AMP 27%
However consumers view financial planners with different branding, but at least partially owned by the big four banks and AMP, as much more independent:
- Financial Wisdom (CBA) 55%
- RetireInvest (ANZ) 37%
- Godfrey Pembroke (NAB) 50%
- St George (Westpac) 20%
- Charter (AMP) 48%
The likely explanation for this difference in perceived independence is that consumers don’t know who owns which financial planning firms. Though, even the numbers for the non-bank branded planners are disappointing, with the highest ranking in the Roy Morgan sample going to Financial Wisdom, with only 55% of people perceiving it to be independent.
Other Roy Morgan research showed that “only 28% of the population rated financial planners as either ‘very high’ or ‘high’ for ethics and honesty”.
It is possible, given the recent bad publicity for bank financial planners, that the purpose of the different branding is to increase the appearance of a separation between the planners and the banks. However as Norman Morris, Industry Communications Director with Roy Morgan, said:
“With a large proportion of advisers being owned by fund managers the need for clients to understand the extent to which their adviser is independent will become critical and should not be confused by branding.”
It can be difficult for consumers to find out if financial planners have links to the makers of the products on which they are advising. If you go to many of the websites of the financial planning brands mentioned in the Roy Morgan research you will find very little mention of the parent organisation. This would likely be included the disclosure documentation, but this is often available at the consultation, not before the client decides to meet with a planner. Perhaps the public register of financial planners will make it easier for consumers to find this kind of information?
The original statistics can be found on the Roy Morgan website.
Want to be kept up-to-date with SMSF and Superannuation changes – why not subscribe to our Newsletter?
This article, as with all content on this site, is for informational purposes only, and is not legal, financial, tax or other advice. Please read our Terms and Conditions of Use.