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Don't fear the banks: Body

ANZ will continue to work closely with independent financial advisers and is improving the product range it offers them, says John Body, head of ANZ Wealth - the country's largest KiwiSaver provider through its subsidiary OnePath.

Tuesday, June 25th 2013, 6:39AM 6 Comments

by Susan Edmunds

He said using the bank’s own network of advisers allowed it to use its own policies and procedures and run quality assurance checks so it had a clear view of what was happening. With external advisers, it had to rely on the regulatory regime, its relationships with stakeholders and the agreements it had in place. “It’s harder to control, you’d expect that as we don’t own them.”

But Body said there were more positive factors than negative about working with advisers. Many had done a lot of upskilling – at a high cost in terms of time and effort – and were committed to the industry becoming more professional.

But investment commission structures would likely change at some point. “As we transition from the old way, of trail commissions, to a fee-for-service at some point, how does the industry reorientate its service model?”

That could be done by educating clients about the services that were being provided and an adviser’s capacity to access external experts, Body said. “At the same time, having the industry on a path of increasing respect. The challenge is it’s not something that’s going to be achieved overnight.”

Body said independent advisers had nothing to fear from the banks. Some clients would want always independent advice and advisers should focus on determining where the clients were who were seeking that non-bank advice.  “There’s a niche. Every part of the market has a niche. Banks have distribution networks and advice forces but not everyone wants to get their advice from a bank.”

OnePath was able to manage its 528,000 strong KiwiSaver base with just 100 AFAs by leveraging off the scale of ANZ to invest in support services, he said, and working on digital offerings.

The regulatory regime and licensing laws would build a more robust industry so people could be more confident that the risk they were taking on was the risk they thought they were taking, he said. But participants also needed to work towards greater transparency.

« No good reason for soft dollar commissions: NaylorIFA working on pro-bono offering »

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Comments from our readers

On 25 June 2013 at 8:26 am adviser said:
We don't fear the banks...but thanks for your concern...
On 25 June 2013 at 11:05 am AFA Muggins said:
With external advisers, it had to rely on the regulatory regime, its relationships with stakeholders and the agreements it had in place. “It’s harder to control, you’d expect that as we don’t own them.”

So, ANZ sees the regulatory regime as a secondary back up option to the way they like things to run?

Given the product history of ANZ and it's partners, I suspect the shoe is on the other foot regarding how 'independent' advisers view the bank.

On 25 June 2013 at 11:14 pm Oracle said:
Watch this space as this particular bank slowly tightens the noose on its independent distributors.

ANZ & Customer Service are mutually exclusive. Just look where they have placed over the years in numerous customer service surveys.

"We live in Your World" - I don't think so!
On 26 June 2013 at 9:30 am David Whyte said:
Interesting thesis, Oracle. Certainly grounds for supporting your concept - given the independent distributors experience with ASB Bank/Sovereign?
On 26 June 2013 at 1:15 pm Fascinated said:
@ALL - "Body said independent advisers had nothing to fear from the banks". Really - really.

Why is it then that OnePath have set about writing to a number of independent advisers letting them know they (OnePath) are reviewing their business relationship - giving advisers time to get their ship in order, but then unceremoniously, writing to the advisers clients (without the timeframe they have provided expiring) telling them they (OnePath) have terminated the relationship.

So nothing to fear? So why then at the same time have OnePath changed the servicing broker to an ANZ bank adviser?
On 26 June 2013 at 4:58 pm Gordon Gekko said:
As with anything in life - behaviours are determined by those with most to lose / gain (ie: benefactors).

In the case of a listed entity (such as a bank), shareholders will demand the greatest levels of return for their investment. Unfortunately that means bye bye to the notion of independence, and hello to the notion of increased wallet share.

You're kidding yourself if you believe anything else

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