According to a letter from ASIC official Lauren Roy to a whistleblower, seen by ifa, the corporate regulator is making an “initial assessment” of reports of misconduct by two practices within AMP’s financial advice network.
The businesses singled out in the document are Insure First Pty Ltd (also trading as Financial Planning Queensland) and Archangel Wealth, both authorised representatives of AMP Financial Planning.
The investigation relates to allegations that both firms publicly refer to advisers under their employment as “independent” despite being aligned to a major financial product manufacturer via licensing agreements.
The term ‘independent’ is restricted under Section 923A of the Corporations Act and cannot be applied to any financial services provider that receives un-rebated commissions or remuneration based on volume, or “other gifts or benefits” from a financial product issuer.
While it might be technically possible for an institutionally-aligned firm to meet the legal criteria for independence, IFAAA president Daniel Brammall said it is unlikely.
“It’s very likely they are only permitted to provide advice on an APL which has restrictions on it, and the law requires no restrictions – whether direct or indirect,” Mr Brammall told ifa.
Even if institutions are limiting APLs only for liability and PI insurance purposes rather than to control product choice, this may still result in rendering the relevant adviser unable to use the restricted term, he said.
In addition, Mr Brammall said cultural issues within institutional advice networks may also affect use of the term, following ASIC’s revelation it believes there is a visible product bias within vertically integrated groups.
“It’s equally unlikely their association with [the institution] doesn’t create any conflicts capable of influencing how they do their job,” he said. “Cultural influence seems to be at the core of the majority of the recent scandals we’ve seen.”
The letter also lists a number of self-licensed firms including Spectrum Wealth, Australian Advice Network and Cornerstone.
***Update***
ifa understands the allegations made to ASIC refer to Spectrum Wealth Advisers Pty Ltd, not to be confused with Spectrum Wealth Partners Pty Ltd.
Is the IFAAA president saying that if an advice firm excludes poor quality products from its APL, they can’t be called “independent”?
Do IFAAA members fully research every one of the thousands of available products for a given category every time they make a recommendation?
Wondering when ASIC will start to consider making the licencee name and logo the most prominent item rather than just being contained in the fine print or being hidden behind a business name?
Surely this wont be an issue if you are proud of your licencee and it provide more immediate transparency for consumers.
Still won’t make a difference for the likes of Fin Wiz, Securitor, Millenium3 etc. A logo and name that still doesn’t accurately show the owner/alignment
Honestly !!! Who gives a flying toss about this crap !!!!
Potentially ASIC, I gather AMP Financial Planning, the practices involved, any other non-independent financial planning practice who has used the term ‘independent” to promote themselves, independent financial planning practices, some consumers….
If you type the following into Google, swapping your website address and the word or phrase you want to search for, you can quickly identify these “naughty word” issues…
site:www.yourwebsite.com.au “independent”
It won’t catch everything, but will find most instances (it will only search pages indexed by Google).
If you search “independent financial” (in quotes) in Google, you’ll find more doing the wrong thing — often 5+ pages deep — but also lots doing the right thing.
58 pages had the word independent Susie. What do I do now?
Put your feet up. You only need to fix stuff on your website if you’re not supposed to be using the word “independent”.
Another Messy Problem
Move on nothing to see here, ASIC will refer them to our own independent internal committee who will review their marketing material and recommend that they be paid a marketing bonus to ensure that they comply
There was a Suncorp clown in Bris who did the same openly on their wensite, who we reported to ASIC and never heard a peep from them…