ANZ moves away from commission model in financial advice
(1 February 2006 – Australia) ANZ is set to introduce a "fee for advice" model to its 330 financial planners over the next two years in a bid to make paying for financial advice more transparent.
ANZ general manager of Financial Planning Mike Goodall said customer feedback indicated that many people found the commission based model confusing.
"A number of customers indicated they would be more comfortable paying a separate fee because it makes it very clear what they’re actually paying for," he said.
The bank said the new model, known as Prime Access, would allow customers to select a variety of service levels, giving them the option of paying fees via cheque, direct debit or regular payments from investment products calculated as a dollar amount or percentage of investment.
Goodall said fee for service would fundamentally change the way that financial advice is valued.
"It involves a change of mindset on the art of our planners as we progressively move away from commissions for fee for advice work," he said.
"What we learnt from an initial pilot conducted with 35 of our planners was that in some cases, customers prefer to continue with the commission based model, particularly those investing smaller amounts," Goodall said.
"A number of customers indicated they would be more comfortable paying a separate fee because it makes it very clear what they’re actually paying for," he said.
The bank said the new model, known as Prime Access, would allow customers to select a variety of service levels, giving them the option of paying fees via cheque, direct debit or regular payments from investment products calculated as a dollar amount or percentage of investment.
Goodall said fee for service would fundamentally change the way that financial advice is valued.
"It involves a change of mindset on the art of our planners as we progressively move away from commissions for fee for advice work," he said.
"What we learnt from an initial pilot conducted with 35 of our planners was that in some cases, customers prefer to continue with the commission based model, particularly those investing smaller amounts," Goodall said.
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