AZ-NGA’s Barrett says advice at inflection point
The financial advice sector is at an inflection point leading into an exceptional growth phase, according to AZ-NGA Group chief executive, Paul Barrett.
As AZ-NGA and Entireti continue to bed down the acquisition of the AMP Limited advice businesses, Barrett said he believed that the opportunity exists to place financial advisers at the top of the value chain.
He told Financial Newswire’s Advice, Wealth and Super: Rewired 2025 Conference in the Hunter Valley that this will represent a significant change from the days in which the major banks were players in financial advice when advisers were regarded largely as a distribution channel.
He said he believed that a form of vertical integration could well make a come-back in the advice profession, but it would be a very different type of vertical integration model than that which dominated in the years when the major banks were dominant players.
Barrett said he believed the new model would be “advice-led” with client interest at heart. He said in order to address affordability & access to advice regulations would need to embrace more of a “two-teir” approach such as the UK model. “The QAR was a good first step.”
“It will be a very different version of vertical integration to that which brought the house of cards down in the Royal Commission,” he said.
“For a start there will be no commissions or conflicted remuneration.”
Barrett said that, while difficult, the Royal Commission had compressed painful change into a short time frame and had provided scope for his vehicle AZ-NGA to stand into the craters left by the banks when they vacated the sector,
He also revealed that AZ-NGA’s involvement in the transaction which saw the acquisition of the Australian Unity financial advice business proceed to be a useful model for the eventual acquisition of the AMP advice businesses.
The new form of vertical integration already has made a comeback. It involves fee based advisers owned or licensed by firms that have their own SMAs, “recommending” those SMAs. The controlling firm makes money from the advice fee, the SMA fee, and often from their own managed funds they embed in the SMA.
Didn’t this bloke lead bank advisers and help make the bank FFNS scandal that lead to RC? What punishment did he ever suffer ? Why listen or trust him ?
As for his rubbish comments,
“It will be a very different version of vertical integration…….For a start there will be no commissions or conflicted remuneration.”
Yeh whatever Mr, with Industry Funds flogging vertical only, single products, with in house funds, via uneducated BackPackers All Paid by Collective Charges.
What rubbish if that is not Commissions & Conflicted remuneration.
The worst Commissions as they are not even disclosed.
Maybe there won’t be commissions or conflicted remuneration (as defined by ASIC). But there will be coercion. Advisers are coerced into selling inhouse products through threat of job loss or weaponised compliance. This is already widespread in union super funds, and is becoming standard practice in larger advisory groups that have inhouse SMAs.
The bottom line is advisers who are supposed to act in the interests of clients are being coerced to act in the interests of the product company that controls them.