Banks are advisers’ number one enemy: Yeo
The biggest enemy independent financial advisers face are the banks, Grosvenor Financial Services chief executive Allan Yeo says.
Thursday, November 22nd 2012, 6:41AM 
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In his opening address to the 15th annual Grosvenor Group conference last week Yeo outlined many of the changes which have taken place in the advisory world.
Some of these related to tax, the introduction of the PIE regime, technology and regulation. However the biggest change in the past 15 years was to the face of distribution.
In the past independent financial advisers looked to firms like AMP and AXA as being the enemy.
“They are not the enemy anymore. It is the banks.”
That has changed and it is now the banks.
He says AMP has even recognised that and bought AXA so it is big enough to take in the banks.
Yeo said currently around 80% of KiwiSaver money is sitting in bank owned schemes and banks also have a major share of the insurance market, particularly through ASB and ANZ’s operations.
Yeo says advice is a relationship business, but that is one area that the banks don’t understand.
In Star Wars terms banks are the Darth Vader’s, Yeo says.
“They’re sucking up everything,”
“Our job is to say how do we counter that and stay relevant?”
Yeo said that Grosvenor’s business is centered around helping and working with financial advisers. However all advisers and related firms need to work together to battle the banks.
There are lots of guerilla battles going on in the market place and some battle victories, however everyone needs to be united to win the battle.
“There are always people fight guerilla (campaigns),” he says. “But guerillas don’t win the war.”
“One of the most important things is to unite.”
He said there are many ways firms and advisers can work together including sharing resources and strategizing ideas.
He told advisers not to see each other as competitors: “You have to see each other as allies.”
Yeo also said banks control advisers through their cheque books, most notably with commission payments.
“Independent providers need to find a way of weaning themselves off that.”
Yeo admitted that advisers and firms like his need to work with banks in some areas, but when it comes to the advice space it is a different story.
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We understand that David Ross was an Authorised Financial
Advisor and through the Ross Group offered Discretionary
Investment Management Services (“DIMS”) as defined by the
Financial Advisors Act 2008.
Looking forward - the main advantage that non aligned advisers have, is that that financial advice remains a relationship industry. As such, consumers will continue to pay a premium to receive bespoke advice from someone who adds value, and whom they trust.
If the small guys are driven out at least then when the next crook flogs a whole lot of life savings there is someone with deep pockets paying the client back.
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The big banks are pulling all the strings around compliance and regulation too. They are easily the most powerful lobby voice in the industry, and unsurprisingly everything is getting easier for these predatory industry participants!!
How many of us have lost KiwiSaver clients who walked into the bank, got sweet talked by some attractive blonde teller into switching their KiwiSaver because of something as minor as ASB's low fees???
Are the FMA that blind to believe that tellers are not giving category one advice?? How about some mystery shops to the big banks to see what these tellers are actually saying??