Read the letter in full below.
For many years the banks have enjoyed a growing volume of clients and revenue from the adviser channel and this has mutually rewarded both the adviser and the banks and supported a customer’s choice to seek advice. However, as time has gone by it seems some banks are happy to undermine this relationship. This alienates the adviser to the advantage of their own branch, mobile lending staff and corporate coffers running roughshod over the customer’s channel of choice on the assumption that they now “own” them. It has the potential to ruin good working relationships, turn potential clients away from the adviser as they cannot offer the same products as the bank can, place possible financial stress on the adviser and build barriers to customers access to impartial advice.
This type of disingenuous business tactic must be seen for what it is and be stopped. The attempt by some banks to dismantle the adviser channel, that has taken decades to build up, demonstrates poor integrity and indecisive business strategy. It is a continuation of what has been going on for years as various executive teams “run with the hares and hunt with the hounds” in pursuit of their market share holy grail.
The consequences are much less choice for the public, as they do not get the same opportunity to work with advisers to find the best deal that suits their individual requirements. This flies in the face of the intent of the Financial Adviser Act which clearly states the purpose of the Act is to raise public awareness and make all New Zealanders financially better off.
The PAA has been made aware of the unsavoury practices of one major bank and will be taking this issue up with them. It is unconscionable that the big end of town can be allowed to act in this manner. We do understand that a small number of advisers have possibly been putting their interests ahead of the consumer, or banks, interest and we support appropriate action against those individuals. However, we do not support tarring all advisers with the same brush, most of whom do an exemplary job of representing both themselves and the product providers to the public. This smacks of predatory actions and is a blunt reaction to the adviser channel.
It also prevents the adviser from putting the interests of the client first.
Your PAA is acting on your behalf.
Kind regards
The PAA Board
