It is time to out the banks?
As you may be aware I am often posting controversial topics in relation to outing the marketing and issues I have with lack of transparency around financial products. For the record, I also include the advice around purchasing property (off the plans with associated depreciation , positive geared houses for a fee, and housing developments with commissions attached) in this general umbrella of financial products, even though it is not formerly recognised as such. On this topic, I had another financial planner sit with me yesterday suggesting to me, to advise my clients to invest in property in a particular development. It’s is by co-incidence, that my brother lives in the suburb suggested and I know it well. Lets just say it is not the pick of the crop. Oh I forgot to mention, the Planner also gets a 3% commission on the sale. Taking tips of Planners can often be concerning.
But for now, Why is it that The top 50 Financial Planning groups are owned by the banks? When my Mother and Father drop into a bank for Financial advice are they being sold a product? Or are they being assessed on their merits? i.e. Why is it that all the banks buy Financial Planning firms, is it to sell their products such as Personal Insurances (Life , Income Protection, TPD and Trauma), Superannuation, and Managed funds? Lets look at the statistics and who you are visiting when you see a Financial Planner.
The following is listed as such RANK/ Company Name/ Amount of Advisers/ Real Owner
1-Professional Investment services-1551-Aviva (22) – Aviva Australia was purchased by NAB
2-AMP Financial Planning-1314-AMP Life
4-Millennium 3 Financial Services-631-ANZ (formerly ING)
5-Commonwealth Financial Planning-730-CBA
6-NAB Financial Planning-502-NAB
7-ABN Amro Morgans-450-Bank of Scotland
8-Charter Financial Planning-462-AXA-Asia Pacific- In negotiations with NAB.(refer to ACCC)
9-MLC/Garvan Financial Planning-471-NAB
10-Financial Wisdom-444-CBA
11-Securitor-438-Asguard –Who has a parent company called Westpac
12-Westpac Financial Planning-554-Westpac
13-Axa Financial Planning-356-AXA- Negotions with NAB (refer to ACC)
14-Genesys Wealth Advisers-366-Axa- Negotiations with NAB (refer to ACC)
15-ANZ Financial Planning-394-ANZ
And the list goes on with other common financial brand names such as Apogee (NAB), Guardian Financial Planning (Asteron-who is ultimately Suncorp-Metway), MLC (NAB), BT (Westpac), Colonial First State (CBA), to name a few.
So where does my Mother and Father go to visit an independent Financial Planner that will be completely transparent? My thoughts are take a tax deductible trip overseas as Australia clearly does not have the answer. This sounds ridiculous (and "NO" I am not suggesting an O/S trip) but look at the above table and you will also see ridiculous! But in case you have an O/S trip in mind this little bit of trivia may help: Remember The Australian Taxation Office’s views on the deductibility of investment advice fees are expressed in Taxation Determination TD 95/60. In summary they will be deductible to the extent that they are on-going management fees or retainers incurred in servicing or managing assessable income earning investments, including switching between such investments, and not related to the acquisition of new investments. Tax advice fees charged by a registered tax advisor or a solicitor are tax deductible. Business advice, such as ideas for a business plan or a marketing plan, and employer superannuation contributions, are generally tax deductible. Fees for Centrelink advice, personal superannuation contributions and estate planning advice are generally not deductible (this is not legal or taxation advice only a view).
www.birchcorp.com.au
In the interests of full disclosure, number three above is Count Financial- Not for Sale.
As you may be aware I am often posting controversial topics in relation to outing the marketing and issues I have with lack of transparency around financial products. For the record, I also include the advice around purchasing property (off the plans with associated depreciation , positive geared houses for a fee, and housing developments with commissions attached) in this general umbrella of financial products, even though it is not formerly recognised as such. On this topic, I had another financial planner sit with me yesterday suggesting to me, to advise my clients to invest in property in a particular development. It’s is by co-incidence, that my brother lives in the suburb suggested and I know it well. Lets just say it is not the pick of the crop. Oh I forgot to mention, the Planner also gets a 3% commission on the sale. Taking tips of Planners can often be concerning.
But for now, Why is it that The top 50 Financial Planning groups are owned by the banks? When my Mother and Father drop into a bank for Financial advice are they being sold a product? Or are they being assessed on their merits? i.e. Why is it that all the banks buy Financial Planning firms, is it to sell their products such as Personal Insurances (Life , Income Protection, TPD and Trauma), Superannuation, and Managed funds? Lets look at the statistics and who you are visiting when you see a Financial Planner.
The following is listed as such RANK/ Company Name/ Amount of Advisers/ Real Owner
1-Professional Investment services-1551-Aviva (22) – Aviva Australia was purchased by NAB
2-AMP Financial Planning-1314-AMP Life
4-Millennium 3 Financial Services-631-ANZ (formerly ING)
5-Commonwealth Financial Planning-730-CBA
6-NAB Financial Planning-502-NAB
7-ABN Amro Morgans-450-Bank of Scotland
8-Charter Financial Planning-462-AXA-Asia Pacific- In negotiations with NAB.(refer to ACCC)
9-MLC/Garvan Financial Planning-471-NAB
10-Financial Wisdom-444-CBA
11-Securitor-438-Asguard –Who has a parent company called Westpac
12-Westpac Financial Planning-554-Westpac
13-Axa Financial Planning-356-AXA- Negotions with NAB (refer to ACC)
14-Genesys Wealth Advisers-366-Axa- Negotiations with NAB (refer to ACC)
15-ANZ Financial Planning-394-ANZ
And the list goes on with other common financial brand names such as Apogee (NAB), Guardian Financial Planning (Asteron-who is ultimately Suncorp-Metway), MLC (NAB), BT (Westpac), Colonial First State (CBA), to name a few.
So where does my Mother and Father go to visit an independent Financial Planner that will be completely transparent? My thoughts are take a tax deductible trip overseas as Australia clearly does not have the answer. This sounds ridiculous (and "NO" I am not suggesting an O/S trip) but look at the above table and you will also see ridiculous! But in case you have an O/S trip in mind this little bit of trivia may help: Remember The Australian Taxation Office’s views on the deductibility of investment advice fees are expressed in Taxation Determination TD 95/60. In summary they will be deductible to the extent that they are on-going management fees or retainers incurred in servicing or managing assessable income earning investments, including switching between such investments, and not related to the acquisition of new investments. Tax advice fees charged by a registered tax advisor or a solicitor are tax deductible. Business advice, such as ideas for a business plan or a marketing plan, and employer superannuation contributions, are generally tax deductible. Fees for Centrelink advice, personal superannuation contributions and estate planning advice are generally not deductible (this is not legal or taxation advice only a view).
www.birchcorp.com.au
In the interests of full disclosure, number three above is Count Financial- Not for Sale.