Only banks win with CRM2 bickering, says veteran

Only banks win with CRM2 bickering, says veteran

Only banks win with CRM2 bickering, says veteran Lost in all the discussion about fees and transparency is a lack of agreement among industry professionals, which could ultimately lead the banks to further gains in wealth management, says one industry veteran. 

“Unfortunately, advisors are not united,” said Tony Battista, a dual-licensed advisor in Montreal. “[Advisors] are not coming out and explaining the role we play in the financial welfare in our communities. As usual the banks will be the big winners and the average Joe the big loser.”

Perhaps, Battista remarked, the time has come for an organization like the Professional Association of Financial Services Advisors (PAFSA) to speak for advisors.

“It’s an excellent idea [PAFSA},” says Battista. “The work we do with the middle class is enormous.”

Battista’s comments come in response a recent WP Thursday article laying out the challenge of getting clients to abandon the embedded commission model. He’s concerned the poor conversion rate will ultimately see clients defect to the banks. That’s despite the potential cost savings of the fee-based model, argue some players.

“The product price could go down a full point,” Burgeonvest Bick Securities advisor John DeGoey told WP in March. “So, if advice costs go up 20 or 30 basis points [by eliminating embedded compensation] and product costs go down 100 basis points, the client is still 70 or 80 basis points ahead, net net.”

Battista isn’t nearly as certain of this utopia suggesting the move to eliminate embedded commissions would only play into the hands of the big six banks who would openly welcome clients with smaller investable assets. 

“Fee-based clients with less than $250,000 in assets,” says Battista, “really don’t make sense.” 
Battista’s biggest concern is that advisors like himself who work hard for their clients building true wealth aren’t getting heard in the general business media with most of the press emphasizing high MERs and low levels of service. 

Without a strong, unified voice for advisors the big banks are going to win the day, he says; and that’s a shame for the little guy.