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MLC completes industry leading transition to fee for advice

01 Jul 2010
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MLC today completed the transition of its advice businesses to fee for advice, a process it began in 2006 when MLC first challenged the industry to drop commissions, improve transparency and engender greater trust in the advice profession.

Garvan Financial Planning, Apogee Financial Planning and MLC Financial Planning have now completed the transition to fee for advice for all new investment and superannuation clients.

They join Godfrey Pembroke, which completed the transition in October 2006 and NAB Financial Planning which introduced a fee for advice model in 2008, the first bank financial planning network to do so.

Richard Nunn, Executive General Manager of MLC Advice & Marketing, said, “Today marks a significant milestone in our organisation’s history. We have worked closely with advisers during the past four years to help them re-engineer their business models to be advice and client centric, with transparent and sustainable pricing.

“Transitioning from a commission based model to fees is extremely complicated. There are numerous pitfalls for businesses that rush the process and miscalculate their pricing models.

“But we have assisted hundreds of advice businesses to transition to fees and not one has converted back to commissions. In fact, the advice businesses that have been operating on fees for several years just keep going from strength to strength.

“Back in 2006 our views around fees and commissions were not popular. But our belief in the value of advice and desire to see more Australians benefiting from the services of a financial adviser kept us focused on encouraging industry change.

“We are pleased to see many of our competitors now moving in this direction. The sooner our industry makes the transition, the quicker we can start to build greater trust in our industry.”

Key MLC milestones:

  • March 2006 – MLC launched one of the first commission-free investment platforms, MasterKey Fundamentals
  • May 2006 – MLC calls on industry to remove commissions as they create a perception of conflict and diminish trust in the industry
  • October 2006 – Godfrey Pembroke removes commissions for all new clients on  superannuation and investments business
  • January 2008 – NAB Financial Planning announces its intent to transition to fee for advice for all new investments and superannuation clients
  • April 2010 – Godfrey Pembroke announces plans to transition to a complete fee for advice model for all new and existing superannuation and investments clients and new business for insurance and mortgage products.
  • June 2010 – Garvan, Apogee and MLC Financial Planning complete the transition to fee for advice for all new clients on superannuation and investments business.

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