Banks nervous about aligned advisers

Addressing delegates to the AIOFP national conference in Sydney last week, Mercer sales leader, investments, Adam McKenzie said that in working with institutional clients, the research house and management consultancy has discovered a change in attitude towards the business of licensing.

“The banks are really nervous about their non-salaried, aligned adviser networks, especially since the CBA and Macquarie experience," Mr McKenzie said.

“They are nervous because it is high risk, they make very little money on the management of a dealership and make it back on the product manufacturing component.

“They are losing control because there is this thirst for flexibility on products. They have taken on board this huge risk.”

Mr McKenzie said the banks are instead more focused on growth in their salaried adviser channels where they maintain greater control and visibility over adviser-client relationships.

More broadly, he said the top priority of the bank-owned wealth management businesses is to “re-engage with their client base”, especially “small to medium passive-type investors”.

“They are investing very heavily in regaining trust [and] are currently developing ways to bring [these customers] back,” he said, pointing to “no advice lifecycle products” in particular.

The comments come as AMP announces it will close its Genesys Wealth Advisers business, following revelations published by ifa suggesting a number of aligned advisers are demanding greater control and product choice and flexibility.