Roy Morgan Research has just released an update of Australia’s most comprehensive analysis of the wealth management industry. The Roy Morgan Research “Superannuation & Wealth Management in Australia” report is based on research taken from over 250,000 face-to-face interviews over the last five years, providing one of the most accurate insights into the wealth management market available.
The report has found that Australians who acquired their superannuation through financial planners are confused as to whether the planner they have used is aligned to a major financial institution or independent. This is especially prevalent for the licensee groups owned by one of the “Big 6” retail groups, such as Garvan (NAB/MLC), Hillross (AMP), RetireInvest (ANZ) and Charter FP (AXA).
Perception of Financial Planner Independence
Adding to this concern is that planners aligned to the major wealth managers continue to funnel the majority of the funds they establish to their parent fund manager, a trend which is largely unchanged over the past three years.
Advisers from AMP have directed the most funds since 2007 to their own fund manager with 82.2% of the funds on average, while ANZ have been the least with only 45.3% being directed internally.
While AXA saw a decrease of 7.3% in the latest period, this can largely be explained by a large increase in the proportion of funds being directed towards self-managed superannuation by their advisers. This is not unexpected given that in late 2009, AXA announced that it had completed the purchase of self-managed superannuation provider Multiport, which would likely be receiving the bulk of this difference.
Proportion of Superannuation Products Obtained through Financial Planners Also With Same Fund Manager
(Data period: January 2007 - December 2010, sample n = 5,426 work based or personal superannuation products obtained through 6 major planning groups).
Norman Morris, Industry Communications Director, Roy Morgan Research says:
“While most who visit a financial planner under the banner of a major wealth company are aware of their ties, confusion continues around those who many perceive are independent, but are actually aligned. Given that these planners will likely still be tied to the groups Approved Product List (APL), it raises the issue of how informed consumers are to this potential conflict.
“While initiatives such as AustralianSupers adviser panel trial are possibly steps in the right direction, it remains to be seen how effective this will be to expanding APL’s beyond a groups own platforms to offer clients the best product to meet their needs and whether the Federal Government will intervene as part of the Future of Financial Advice Review.
“For a client that may be entering an advice relationship on the premise that the financial planner they are visiting is independent of any major financial institution, however this is clearly not always the case and the lack of independence regarding these planner’s approved products raises the question of whether the best interests of the client are always being served.”
Purchase the complete detailed Roy Morgan Superannuation and Wealth Management Report. This report reveals where Australia’s household wealth really resides. It contains profiles of Wealth Management Customers & Quintiles, Channels used to purchase wealth management products, Satisfaction & Switching intentions by product category and brand, the role of financial planners and ranks the top superannuation fund managers.
Click here to browse thousands of accurate, insightful quantitative Roy Morgan research reports and profiles ready to download now.
For more details contact:
Roy Morgan Research
Roy Morgan Research is Australia’s best known and longest established market research and public opinion survey company.
Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.