What is the Royal Commission?
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was established on 14 December 2017 by the Governor-General of Australia.1
The Commission will consider the conduct of banks, insurers, financial services providers and superannuation funds (not including self-managed superannuation funds) regarding the following:
- whether financial products are recommended in the best interest of clients;
- payment of commissions by product manufacturers (such as insurance providers);
- education and professional standards required to be a financial planner; and
- collection of fees where advice or services were not provided.
It will also consider how well-equipped regulators are to identify and address misconduct within the industry.2
Is NPFG part of the Commission’s inquiry?
NPFG is licenced by RI Advice, which is owned by ANZ. ANZ will be among the witnesses called to give evidence during the public hearings, which commenced on 16 April 2018. So you may see ANZ and possibly RI mentioned in the media.
IOOF Holdings have recently purchased RI Advice. IOOF are a pure advice business and are not affiliated with any banks. IOOF have a long history of partnering with other financial services organisations, as well as other advice providers throughout Australia to ensure they always act in the clients’ best interests providing them with greater choice and flexibility.
What changes are likely to occur after the Royal Commission?
The Royal Commission will cause a drastic cultural shift in the financial planning landscape. This is necessary to heal the shaken confidence and trust in the industry by those affected by poor financial planning recommendations.
NPFG would like to see a transition from fee-focused-recommendations to a system where financial planners act in the best interest of their clients, and where nurturing of long term client relationships is encouraged throughout all levels of the industry.
The current system of vertical integration is likely to be removed once the Commission releases its final recommendation. It is argued that vertical integration provides benefits to its customers such as access to advice at a lower cost. However, such a business model gives rise to providing financial advice that is inherently conflicted from acting in the client’s best interest.3
Finally, there will be greater transparency of passive ongoing fees paid by clients and improved clarity on the value they receive in return for payment of such fees.
Why NFPG is different?
At NFPG we pride ourselves on delivering valuable, client driven advice free from the product and fee bias highlighted in the Royal Commission.
We are local and see our clients regularly, with a team that will make you feel welcome in our offices or alternatively come to you. Physical distance and regularity of contact between client and adviser has formed a focal point of the Royal Commission.
We have a thorough process to ensure we understand what drives you, what makes you happy and get a complete picture of what it is you are trying to achieve.
We complete thorough research on your existing financial products, develop the most appropriate strategy aligned to your goals and use them in selection of the most appropriate products for you.
Once your financial plan is implemented, we meet you on a regular basis to check-in, identify if your current circumstances have changed since your last plan and adjust your strategy accordingly to ensure it is still working to achieve your goals.
We ensure complete transparency with disclosure of the fees for our services. We have open and honest conversations about our fees, believe in the value we provide and will only ever proceed with clients who fully understand how we are remunerated for our advice.
NFPG remains a passionate advocate for the value good advice brings to people’s lives. The Royal Commission will bring about change to our industry which we at NFPG welcome. If you would like to learn more or have any questions relating to your current financial advice, please contact our team.
Information about the Royal Commission into Banking, Superannuation and Financial Services can be found here.