The reason our financial advice business remains outside the structure of a large bank or institution is because our goal is to provide the best financial advice to you, our client.
Instead, we’ve chosen to operate under the Australian Financial Services Licensee (AFSL) of FYG Planners who are privately owned, managed by a board of current financial advisers and have a commitment to the highest fiduciary standards.
Our partnership with FYG Planners affords us the freedom to run our business the way we choose and most importantly choose the right financial products for you as our client without any corporate influence.
The importance of this partnership with FYG Planners has again been underlined by a recent report by ASIC into financial advice delivered by the big banks and institutions, titled “Financial Advice: Vertically Integrated institutions and conflicts of interest.”
ASIC’s report resulted in two very important key findings:
- While the big institutions’ approved product lists were made up of 21% of in-house products and 79% of external products, when a client’s money was invested, 68% of the time it went to their in-house products. Just by the breakdown of these numbers it appears the institutions have a bias towards their own products. As ASIC noted, “licensees we reviewed may not be appropriately managing the conflict of interest associated with a vertically integrated business model.”
Client Difference: FYG Planners have no in-house products, so there is no bias towards any financial product. This leaves us free to utilise the best products and tailor your portfolio solely to best suit your needs, not the sales targets of a bank.
- Only 25% of the advice given by the big institutions was considered to be compliant by ASIC. 65% was considered non-compliant, with 10% considered non-compliant with significant concerns. The issue of non-compliance partially stemmed from recommending new financial products when there was no demonstration that a client would be better off. In the 10%, the client was regarded as financially worse off from a recommendation. Referring to finding 1, ASIC also found a higher level of non-compliance when advisers recommended their in-house products.
Client Difference: FYG Planners are a client first AFSL and have no interest in any financial product. This means when we recommend a change to an existing product, it only comes after a full review where we can show any change will be beneficial to your circumstances.
The institutions named in ASIC’s report were AMP, ANZ, Commonwealth Bank, NAB, & Westpac.
On a similar vein, this video briefly explains the difference between FYG Planners and institutional financial advice.
Most big bank planners fail to act in their client’s interests: ASIC – Sydney Morning Herald
This represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.