Financial planners have come out in force to launch a scathing rebuttal of claims from one Victoria-based mortgage broker that they have lost the trust of the Australian public.
As first reported in Australian Broker, ProSolution Private Clients Stuart Weymss has penned a lengthy Manifesto, available on www.brokerrevolution.com.au, calling on brokers to join a revolution that would see them positioned as money management advisers of choice in the future.
As part of his argument for mortgage brokers to gain financial services supremacy in the eyes of the public, Wemyss claimed that financial planners had already lost their trust, due to a reliance on commissions and a limited range of advice that often did not include property.
“Research shows that between 60% and 80% of people believe that the best source for financial advice is to see a financial planner. However, the proportion of Australians that have an ongoing and engaged relationship with a financial planner appears to be in the range of 10% to 20%, based on various studies," Wemyss wrote in his Manifesto.
“Why are people so reluctant to engage with a financial advisor? I believe they have generally lost the trust of the Australian public because of their reliance on commissions from only one investment asset class (managed share investment products) and reluctance to consider property investing in their advice. The important point is that Australian’s don’t believe that they can get independent and reliable advice from financial planners.”
Financial planners reading leading financial planning industry publication Wealth Professional came out in defense of their industry on its popular online forum, arguing that Wemyss' argument didn't stand up, primarily due to broker commission conflict.
Fin Plan 1 pitched an attack right back at mortgage brokers.
"What advice can a broker provide? Borrow money. For what investment purpose? Property. That's a wide sweeping plan! When a client needs that I send him to a broker."
Meanwhile, Scott called Wemyss' Manifesto a 'pile of tripe', even though Scott did say that he does have in place a referral agreement with a mortgage broking office.
"They are 100% conflicted by commissions and get sent all over the world each year by the big four, yet no disclosure is needed. They also lend as much as they can to their client's and then when I get to see them I can't believe some of the loans they get approved," he said.
QFactor said the most important ingredients for good advice - assuming the basics of trust honesty, ethics are present - were skill, qualifications and professionalism, as well as a remuneration structure free from conflicts.
"Where would mortgage brokers rate in either category?" he asked.
Conservative accountant weighed in to the debate, saying that both financial planners and brokers had 'stuffed' the advice industry altogether.
"A term called financial planner was born to try to take over the roles of other professionals that had been providing excellent impartial advice for years with no conflicting interests. Now the whole thing is stuffed. Everyone is caught up in more regulation trying to stop whatever," he said.
However, Alan had a different idea of where things could go in future.
"Simple, see a person who holds both qualifications. It's becoming more and more common. Many accountants are heading down that path," he said.