Steve Tucker and Paul Heath, who until recently were respectively chief executive of MLC and JB Were, have started their own independent, fee-for-service financial advisory business as part of the reaction against bank-owned “vertically integrated’’ businesses that sell in-house products.
MLC and JB Were are both owned now by National Australia Bank and both executives left their CEO jobs earlier than most observers had expected, Mr Tucker leaving in March last year.
Koda Capital, which is being backed by a number of private equity heavyweights including Grant Samuel Private Equity founder Andrew Rothery, will officially open its doors in Sydney tomorrow.
It is understood to have a client list of corporate executives nervous of the increasingly obvious problem of conflicts of interest in the 80 per cent of financial advisory businesses in Australia owned by banks and big insurers, because they have historically placed emphasis on selling their own products.
“The profit motive overcame the importance of advice to the consumer,’’ said Mr Tucker.
The financial advisory system in Australia had worked well over the decades despite those shortcomings, he said, but the market was now moving strongly in favour of advice that unequivocally put the interests of the client ahead of any other consideration.
Read more at theaustralian.com.au