As the first generation of financial planners retire and sell their businesses, after a long career of upfront fees and trailing commissions, the big banks are there to buy them out.

And soon their clients will be switched into financial products that have been manufactured by, or are associated with, their new institutional masters. The banks may pay lip service to independence but one need look no further than the recent spate of industry deals to see the threat to arm’s-length advice.

The Commonwealth Bank, for instance, has cleaned out the entire board of Commonwealth Financial Planning (CFP) in recent months – that is, the licensee that controls the approved product list, and the vehicle into which the bank is wrapping all its acquisitions: CBA Financial Planning and the wholly owned planning practices, Financial Wisdom, Whittaker MacNaught, BankWest financial planning and, lately, Count Financial.

An insider told BusinessDay that the executive shuffle and the rash of senior departures were a dismantling of governance mechanisms designed to push CBA/Colonial First State products rather than provide the best advice in the interests of the bank’s 350,000 clients.

The bank claims otherwise, naturally. Approved product lists were “independently determined” by the research and product committee, we were told. The majority of the products on the APL were “non-CBA products”, a spokeswoman said.

There is no denying the aggressive consolidation. The CBA experience mirrors the broader trend towards consolidation and rationalisation of the Australian financial planning industry as the big players swallow the smaller players to push their financial products to a bigger client base. It’s all about distribution.

And in the case of the CBA, there has been no dilly-dallying.

The CFP product review committee, which decides which products go on the approved product list, has been whittled away, four of the seven members leaving in the past eight months (most in the past four months). This product list is used by all planners aligned with and owned by CBA.

Recently, the head of BankWest Financial Planning, Cassandra Hinze, left after just a year at the bank. CBA says she decided to go after the role was relocated to Western Australia.

Three months ago, the general manager for CBA Financial Planning, Neil Younger, left the company to go to rival bank ANZ.

Four months ago, the head of Institute of Advice, John Carnevale, left the organisation after his position was made redundant.

Eight months ago, the general manager, advice and distribution, Paul Barrett, departed for ANZ Wealth and was replaced by Marianne Perkovic.

And the most recent departure was Count Financial chief Andrew Gale, who left two weeks ago, replaced by senior CBA executive David Lane at the helm of Count. The bank had just put the finishing touches on its $373 million acquisition of the financial planning business.

Insiders claim there has been a stacking of CFP management with executives who are more amenable to the vertical integration strategy and sale of in-house product.

Looking at the CFP board, Mark Baxter and Paul Barrett are gone, replaced by Peter Taylor and Marianne Perkovic. Greg Johnson moved to another division, replaced by Michael Venter. Linda Elkins “assumed new responsibilities within our business which prevent her from continuing this directorship due to a conflict of duties”, the spokeswoman said.

Owen Eaton also had a change of role and was replaced by Lyn McGrath from the retail bank. And the new chairwoman of the board is Annabel Spring, who started in October.

Critics say the responsible entity for Colonial First State funds does not have an independent board and this undermines the prospect of independent advice for the bank’s clients.

The bank however told BusinessDay that there was no legal requirement for a responsible entity (RE) to have an independent board.

“The CFSIL [Colonial First State Investments Limited] board is made up of directors all internal to the CBA group and, in line with managed investment scheme legislative requirements, this RE maintains a compliance plan and has a compliance committee whose members are majority independent and external to the group, including the chairman,” it said.

The reason a bank buys a planning business is to flog more of its products. And lack of independent advice is a legitimate issue for consumers. Yet there is nothing in law and little in the regulations to stop an institution selling its own products, willy-nilly, to its own financial planning clients.

Nor does advice need to be in the ”best interest” of clients. There only has to be a ”reasonable basis” for the advice.

One of the most recent reforms to be put to Parliament is the proposal that advisers be legally obliged to act in the ”best interests” of their clients. It sounds simple but may have to be tested by case law to establish what it really means.

In the meantime, the newly acquired planners will continue to switch their clients to the products manufactured by their new masters.

Commonwealth Bank might be the most aggressive – or “ahead of the curve”, some would say – but it is by no means alone. They all do it.