Is there a product pushing culture in the financial services industry?
The current sessions of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry are likely to uncover what most property investors have long suspected – that there is a product pushing sales culture within the financial planning industry which encourages some to act in their own, rather than their clients’ best interests.
Many financial advisors do not recommend property investment when providing supposedly independent and unbiased advice regarding investment choices to their clients.
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It’s not that property doesn’t generate both cash flow and capital growth, but rather that advisers can profit from the sale of certain in-house financial products to their clients by receiving financial rebates, commissions, kickbacks or finders’ fees which they don’t receive from providing property investment advice.
This encourages some to recommend certain financial products even when they provide less than optimum results for their clients when compared to independent property investment choices, because such advice does not offer advisors the returns offered to them by other financial products.