Why you should never seek advice from a Super Fund Financial Planner

Back in August 2019 the Government at the time released the findings from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. There were a lot of insights provided in the report, but most of this stemmed from financial planners working within organisations that were linked to product distribution.

It is like, walking into a Toyota dealership and asking if a Toyota car is going to really match your needs. The dealership is never going to say, no, you are probably better off going to Hyundai as their value for money is a better option and the exact product that you are seeking is exactly what you are after.

Following the report being released, essentially, a large number of changes occurred, and close to 43% of the Financial Planners left the industry. Interestingly, a large number of these advisors were product-linked salespeople. In addition to this, the code of ethics was formally enshrined in the industry, with ethical standards Standard 3 being one of the principles:

“You must not advise, refer or act in any manner where you have a conflict of interest or duty.”

The reality is if you are working with a financial planner who is being paid for a product manufactured, they are not an advisor. They are salespeople who are pushing a product and the company's agenda and talking to you about the features and benefits of the product they sell, not unlike the Toyota salesperson.

Most product-paid financial planners/salespeople would object to this characterisation. They would likely cite limited examples, of when they have informed a member to use another product provider and or boasted that they believe they have the best product in the market. However, they would overlook the glaring commercial reality that if they commenced a trial to send every single member to another superannuation fund provider that was not theirs, they would be out of a job at some point in time in the future. Until such time as a financial planner can objectively consider the market and then place that client into a super fund without any conflict of interest or duty, they are just a salesperson dressed up trying to be a financial planner but, in reality, just degrading the profession.

AJ Financial Planning is proud of the fact that we are not linked to any product distribution and can objectively consider the financial planning strategy and investment product or superannuation solution that is appropriate for you alone.