What a shock to discover that sales commissions that are paid to financial planners and accountants for the most part have nothing to do with advice in the interests of the client. They are about selling the particular sponsors' product and, shock horror, the world is starting to find out that is true."
These comments follow the Australian regulator disciplining AMP over its failure to manage conflicts of interest in its advice to clients about switching super funds last year. After a major surveillance program, it was found that AMP had advised customers to switch from rival funds that 93 per cent of new business had been pumped into AMP products.
"It's disingenuous for the product providers to pretend that somehow they didn't know it, or that it was all naughty planners. Nothing to do with the naughtiness of the planners. It's a deliberate strategy on behalf of the superannuation providers who pay people very lucrative trail commissions out of a person's lifetime savings."
"But the problem is not the commissions. The problem is that the clients actually believe in most cases that they are getting advice in their best interests."
As somebody who has been sucked in in the past, it is good to see some scrutiny of this shady business that everyone is forced to participate in and some of the scum buckets who operate in it.
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