Wednesday, November 25, 2015

The Old commission based salesman should retire

I was asked by Louise Weihart from merger markets whether the Suncorp financial planning arm of Gaurdian was saleable ....

Below is my rant

What do you think?

Hey Louise
It seems as if Suncorp has been having all sorts of problems with Gaurdian Advice – their life insurance advisory firm.

The model of flogging financial products to the unsuspecting public , for massive upfront commissions is over… (thank the lord!!)  

ASIC has been concerned that their Authorised reps of Gaurdian  were not being properly supervised – thereby running the risk of giving unsuitable advice to their 130,000 customers. … and they were not alone!! ... their business is dying!! 

The value to a potential acquirer will be their customer base… but it will be interesting to see how “loved” the clients really are.

The lines between mortgage broking, financial planning and accounting are blurring, with firms offering holistic advice and a one stop shop to the individual.

The new model of holistic financial advice – provided by accredited , suitably qualified financial planners, on a fee for service basis – seems to be the way to go. Each client should be seen by the financial planner at least twice per year. 

Risk mitigation (supported by Insurance) is a critical part of the financial planning process. IT is key however to assess all 4 pillars of wealth creation…..
-          Cash Flow
-          Asset creation
-           Leverage to create your desires asset base needed for retirement and legacy
-          Risk Mitigation

A good financial planner will be able to guide the individual through each of the 4 pillars and be able to refer them to the relevant professional to provide the optimal solution for the client.

The focus should not be on how much commission can be made from the client….

The focus needs to be fairly and squarely on the client… what is best for him….

The financial planner should not favour any specific product or company, but should be able to offer objective professional advice – and be knowledgable on all 4 pillars…. Similar to a GP. 

They need to have the ability to refer to specialists who have depth in various specialities.

Below is the Ark Total Wealth model 



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