Financial Services Royal Commission
The Royal commission has shone a spot light on the financial services sector of Australia, in particular the banks. The findings have been less than glowing and there needs to be some changes and protection of the consumer from dubious practices.
We need a strong banking sector for the economy, and we need it to be profitable. Unfortunately, shareholders may not understand that what’s in the clients’ best interest should also be in the banks’ best interest. Disappointingly the Royal commission did not address the “product sales advice” which simply means if you get advice from an institution don’t be surprised if you get their own products. The main example from the Royal Commission being AMP. Financial advice from the banks and Financial Institutions has always been compliant product distribution.
The main recommendation from the Royal Commission which has given the banks a boost is the suggestion to stop Finance Brokers commission. This will send many brokers out of the industry make the industry less competitive and allow banks to charge more for Home loans.
In my experience the large financial institutions are not the ideal advice point. Yes, some have good products and are fit for purpose but are they suitable for your purpose?
Financial advice always begins with an understanding of where you are and where you want to go. Once this is established it is now up to the adviser to design the most effective strategy to get you there, taking into consideration your risk profile, your age and time you have to achieve your result. This process must include managing your strategy while protecting and growing your assets. As logical as this sounds, this process often gets derailed by life's events. So, at least once a year, you should also review your strategy to see if you are still on the right track.
As your accountant probably knows more about your finances than anyone else it’s a good place to start. Since forming our partnership with Rob Hauer Accounting we have been pleased to see clients come to us for help. Some who have never used the service of a Financial Adviser before are pleasantly surprised with our process.
Venn Williams, CEO BlueKite Capital