{"id":26817,"date":"2014-07-15T16:11:23","date_gmt":"2014-07-15T06:11:23","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=26817"},"modified":"2014-07-15T16:11:23","modified_gmt":"2014-07-15T06:11:23","slug":"client-best-interests-compromised-by-cross-selling","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2014\/07\/15\/client-best-interests-compromised-by-cross-selling\/","title":{"rendered":"Client Best Interests Compromised by Cross-Selling?"},"content":{"rendered":"<div id=\"polls-123\" class=\"wp-polls\">\n\t\t<div class=\"pollHeader\"><strong>Is it possible to cross-sell a restricted range of financial products and still serve the customer's best interests?<\/strong><\/div><div id=\"polls-123-ans\" class=\"wp-polls-ans\"><ul class=\"wp-polls-ul\">\n\t\t<li>No <small>(54%)<\/small><div class=\"pollbar\" style=\"width: 54%\" title=\"No (54% | 77 Votes)\"><\/div><\/li>\n\t\t<li>Sometimes <small>(24%)<\/small><div class=\"pollbar\" style=\"width: 24%\" title=\"Sometimes (24% | 34 Votes)\"><\/div><\/li>\n\t\t<li>Yes <small>(22%)<\/small><div class=\"pollbar\" style=\"width: 22%\" title=\"Yes (22% | 32 Votes)\"><\/div><\/li>\n\t\t<li>Not sure <small>(0%)<\/small><div class=\"pollbar\" style=\"width: 1%\" title=\"Not sure (0% | 0 Votes)\"><\/div><\/li>\n\t\t<\/ul><div style=\"text-align: center\"><\/div><\/div>\n\t\t<input type=\"hidden\" id=\"poll_123_nonce\" name=\"wp-polls-nonce\" value=\"cf31aa787b\" \/>\n<\/div>\n\n<p>The majority of advisers reject the notion that it&#8217;s possible to cross-sell a restricted range of products to clients and still serve their best interests.<\/p>\n<p><!--more-->Addressing the heightened industry debate currently surrounding client best interests (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2014\/06\/30\/cfpl-scandal-a-lesson-for-entire-industry\/\">CFPL Scandal<\/a>\u2026 and <a href=\"https:\/\/riskinfo.com.au\/news\/2014\/07\/03\/serious-conflict-posed-by-vertical-integration\/\">Serious Conflict Posed by Vertical Integration<\/a>), 58% of respondents to our latest poll believe a customer&#8217;s best interests cannot be served if they have access only to a restricted or limited range of products, as is typically the case within vertically integrated organisations, such as banks and their distribution networks.<\/p>\n<p>One in four advisers believe it is sometimes possible to serve client best interests under these circumstances, while 18% believe client best interests can be served.<\/p>\n<p>One adviser has offered a realistic assessment of the situation, given the current structure of the financial advice sector.\u00a0 He said he sees no issue in companies trying to cross-sell a product that may improve the client&#8217;s financial position, but:<\/p>\n<p style=\"padding-left: 30px\"><em>&#8220;I see the problem being that a company may only offer their own products, when there may be 10 more appropriate products in the market.&#8221;<\/em><\/p>\n<h6>having a suitable product (rather than most appropriate product) is better than not having any of these products at all<\/h6>\n<p>However, the same adviser added,<\/p>\n<p>&#8220;<em>&#8230; I guess having a suitable product (rather than most appropriate product) is better than not having any of these products at all.<\/em>&#8221;<\/p>\n<p>Another adviser said he believes the main point in this debate is related to cross-selling in an environment where only a subset of the products in the market is available for purchase. But this adviser also observed that compliance obligations relating to advice (general vs personal) and the availability of cooling off periods offer &#8220;<em>&#8230; enough consumer protection&#8230; to minimise issues<\/em>.&#8221;<\/p>\n<p>So, we have received a majority opinion that cross-selling a restricted range of financial products cannot accord with what is in the client&#8217;s best interests. But there also seems to be a feeling that, as long as all other compliance obligations are met, and as long as the products are &#8216;suitable&#8217; for the client, even if they are not the most appropriate, then this is better than the client receiving no advice and no financial products.<\/p>\n<p>Does this approach set the bar too low in terms of client expectation and industry professionalism?\u00a0 Or does it simply reflect the reality of the current industry advice structure? And to what extent does the answer to our poll question change if you drill down to the types of financial products under consideration?\u00a0 This is not a straight-forward issue and it does not appear to offer a simple solution. As always, we welcome your views&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The majority of advisers reject the notion that it&#8217;s possible to cross-sell a restricted range of products to clients and still serve their best interests.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,49],"tags":[],"class_list":["post-26817","post","type-post","status-publish","format-standard","category-compliance-regulation","category-polls"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/26817","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=26817"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/26817\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=26817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=26817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=26817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}