The reason our AFSL remains outside the structure of a large bank or institution is because our goal is to allow advisers to provide the best financial advice to their clients.
Instead, FYG Planners remain a privately owned Australian Financial Services Licensee (AFSL), managed by a board of current financial advisers with a commitment to the highest fiduciary standards.
FYG Planners affords advisers the freedom to run their business the way they choose and most importantly to choose the right financial products for their clients without any corporate influence.
The importance of this partnership with FYG Planners and its advisers 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 advisers with FYG free to utilise the best products and tailor portfolios solely to best suit the needs of their clients, 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 an adviser recommends a change to an existing product, it only comes after a full review where they can show any change will be beneficial to their client’s 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.
Links
ASIC Report
REP 562 Financial advice: Vertically integrated institutions and conflicts of interest
Media Coverage
Product Flogging Still a Problem In Financial Advice – The Age
Most big bank planners fail to act in their client’s interests: ASIC – Sydney Morning Herald
ASIC slams banks, insurers over conflicts and poor financial advice – ABC
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.