Gareth Morgan joins SIFA
One of the financial planning industry’s most trenchant critics, former economist and investment banker Gareth Morgan, has joined the ranks of the sector.
Friday, April 16th 2004, 12:27AM
by Rob Hosking
"Well, I won’t be there to be a wallflower," he told Good Returns.
Morgan has, via his newspaper columns, recently attacked the industry’s standards, saying that people who hold themselves out as financial advisers should not be receiving commissions from finance companies. If they are, he argues, they are working for those companies, and not the client.
"I’ll be putting the question to the conference, just what is your idea of ‘independent’ is?" They’ll probably say, someone who isn’t part of a franchise operation for Tower or AXA or whoever, and we’ll take the debate from there.
"If I can’t move it that will probably be it, I suppose."
His criticisms of the industry have brought a counterattack from the Financial Planners and Insurance Advisers Association head Phillip Matthews.
Morgan says he had considered joining the FPIA as well as the SIFA, "but after Matthews’ comments I think it’s a hopeless cause. They’re commission salesmen, not financial advisers, and what they are doing is being outlawed in Australia at the moment."
Three years ago Morgan was guest speaker at an FPIA annual conference and back then he told the association that the industry "needs its lowlifes" as a point of differentiation. Despite appearances, his view hasn’t changed.
"There’s two issues. One is the need to protect people from the equivalent of a Renshaw Edwards. I see where they’re coming from there, although I don’t think you will ever be able to get completely rid of that. There will always be human frailty.
"Where I’m coming from on this issue though is a systemic problem. This industry doesn’t actually serve its clients."
One SIFA member with a similar high public profile to Morgan’s, Financial Focus’s Murray Weatherston, cautiously welcomes Morgan’s addition to the group.
"It all adds to the debate," he says. "Gareth’s got his view, which I don’t necessarily share. I don’t think you’ll ever abolish commissions."
And SIFA president Phillip King says that Morgan’s well-known views were no bar to his joining the ranks of financial planners.
"I’m perfectly happy he has joined. And as far as hidden commissions and fees goes, I think it is time they got stopped."
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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