CBA education move ignores 'sales culture'

Responding to comments from CBA executive general manager, advice, Marianne Perkovic that the bank’s implementation of new adviser standards is a “step forward for the industry”, Australian Unity Personal Financial Services' head of advice, Craig Meldrum, speculated that the initiative may not go far enough.

“I applaud higher education standards across the profession but I would much more like to see the CBA (and all vertically integrated advice businesses) address the structural conflicts at play where a product manufacturer owns the advice channel,” Mr Meldrum said.

“Marketing the higher education angle looks good for public confidence but it is a slap to CBA financial planners because it infers they are the (only) problem that needs fixing rather than reviewing the sales culture that David Murray was instrumental in creating,” he added.

“I would prefer to see swift action to address the conflicts inherent in [Commonwealth Financial Planning] and [Finanical Wisdom] and the inadequate response to redressing impacted clients.”

Mr Meldrum’s comment was one of more than 30 – mostly anonymous – responses published on the ifa website yesterday, the bulk of which criticised CBA’s response as focusing on individual adviser standards rather than more structural conflicts of interest.

Ian Bailey, chief executive of the boutique firm Bailey Roberts Group, commented under his own name, calling into question the bank’s myopic focus on adviser standards.

“This is not just about education,” he said. “The issue is conflicted remuneration, sales pressure , authority and job security. The banks’ interest and clients’ interest will always be conflicted. The only way to fix the advice industry is to have all advisers licensed directly.”

The comments follow revelations by AFSL application consultants that pointed to an increase in interest in self-licensing since the CBA advice fiasco escalated.