One of the country’s biggest real estate agencies, Ray White, has stunned the financial services industry by setting up a financial planning arm at a time when the sector is suffering from a crisis in confidence following a series of scandals.
An Australian Financial Services Licence (AFSL) is imminent and the family real estate business, which has a network of 750 real estate agencies across Australia and 500 mortgage origination brokers, is expected to open its financial planning business before Christmas.
The new business, Wealth Market, will be headed by Jason Powell, who has a background in the financial planning industry, including Professional Investment Services and management roles at Commonwealth Bank’s financial planning division between July 2007 and October 2010, when the financial planning scandal erupted and allegations of file tampering and cover-ups were made in the senate committee.
News spread like wildfire as the industry digested the implications of a real estate agent with mortgage broking and insurance businesses building an army of financial planners to flog wealth management products. At issue was whether the new business was simply about real estate agents capturing more of the value chain in property advice (including SMSFs) and the inherent conflicts that would create.