The Association of Independently Owned Financial Professionals (AIOFP) has formally entered into a strategic alliance with the Next Rural Group to provide succession and wealth transition advice to rural businesses throughout Australia.
Next Rural is a rural succession planning group that, through arrangements with various agribusiness service providers, financial institutions, and industry groups, has “extensive exposure to the approximately 100,000 farming families around the nation”.
According to the AIOFP and Next Rural, with the average age of a farmer currently 58, rural land values at record highs and the vast majority of agricultural businesses family-owned, the need to address transition and succession planning for farming families is “ever-increasing”.
“Managing the complexities of a transition and succession plan is challenging, third-party independent advisers are crucial to a successful outcome for all family members,” said Next Rural managing director Mark Scanlon.
“This is the primary reason why Next Rural has appointed the AIOFP to assist in the provision of high quality and independent financial and wealth advice to our clients around the nation.”
AIOFP executive director Peter Johnston said that the association’s Certified Financial Strategist (CFS) designation plays a “critical role giving third parties confidence they are using the very best adviser”.
“CFS Advisers must eliminate conflicts of interests and mitigate risk to be accredited,” Johnston said.
“To provide further peace of mind to all stakeholders, CFS Advisers are required to use a specific Approved Product List compiled by practising members of the AIOFP Risk and Compliance Committee for product recommendations and attend a training course on the rural sectors specific needs.
“The width and breadth of the AIOFP and its members provide the framework and capacity to address the $3.5 trillion intergenerational wealth transfer anticipated to occur by 2050.”
The deal follows the announcement of a client program for members with London-based Coutts at the AIOFP’s Canberra Conference in November.
Under the informal referral relationship with Coutts, it will enable AIOFP members to offer Coutts services to their high-net-worth clients and, where Coutts’ Australian-based clients want assistance, the AIOFP will offer CFS-designated advisers to them.
At the time, Johnston also noted the impact of the CFS designation and its “central role in gaining access to market opportunities with corporates, banks, other associations, and super funds”.
“We had to give comfort to these entities that only the best financial advisers will be offered the role and the characteristics of qualifying as a CFS designated adviser has greatly assisted this outcome,” Johnston said.
“CFS is not just about academic qualifications, it is also about the elimination of conflicts, mitigation of risk, experience and practice efficiency – all vital ingredients for a successful advice outcome.
“In addition, with some of these AIOFP clients, we will be constructing a specific Approved Product List (APL) to ensure the risk of product failure is greatly mitigated. At the end of the day, most clients care more about the return of their capital than the return on their capital.”
