Speaking to ifa, Aspirations director Michael Barker announced the business has left the Charter licensee and obtained an AFSL.
Aspirations came to be licensed by Charter following the collapse of AMP’s Genesys dealer group – first reported by ifa – which became part of the AMP network via the 2011 merger between the major institution and rival AXA.
Mr Barker said his firm was one of a number of Genesys member firms that never fit neatly within AMP’s dealer group culture.
“AMP never wanted the Genesys brand, and Genesys never really wanted AMP, we just woke up one morning and were in bed together, and that’s not really what either party wanted,” Mr Barker said.
“Everyone was very open about that, and a lot of the Genesys advisers with their ‘independent’ mindsets didn’t really fit into that model.”
When AMP decided to “rationalise” the Genesys business following a “strategic review”, Aspirations was one of a number of practices who stayed within the AMP network, saying the institution made it “very easy” for member firms to transition to other aligned licensees.
However, Mr Barker ultimately decided to leave the network, explaining that he and his staff “don’t necessarily like the vertically integrated model”, and will now be aiming to “strip out as much conflict as possible” by avoiding working with large institutions where possible.
“We intend to have very little association with institutions, so some other self-licensed businesses have gone down the path of getting support from large institutions, we took the view that going to be a bespoke boutique business, therefore we’re going to associate ourselves with other like-minded individuals,” he said.
AMP is the first of the institutions to appear before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry next week to discuss “fees for no service” conduct and the operations of its dealer group network.
Commenting on the upcoming hearings, Mr Barker said vertical integration and fee for no service are likely to present challenges for AMP and the other institutions.
“AMP certainly will have problems come to light, nothing that I know in detail, but I would expect you are going to find issues particularly around a couple of key areas, one being the usage of own products and all that traditional vertical integration business,” he said.
“The second thing I think will come up is what we call fee-for-no-advice; those two will probably be the big areas that come up.”
In the wake of Genesys’s closure, ifa predicted mass exodus from the AMP network and similar organisations from leading practices seeking greater independence.
Excellent and a trend others should follow. I concur with other comments only BOLR (way over market) is keeping some trapped from the self Licencing that is what their customers want – unbiased. It’s so conflicted, riddled with bias. A LOT of dead wood needs to leave if they don’t accept true professionalism – which isn’t lining your own pockets.
@ Dave It’s not what ASIC wants but what Australians deserve. They deserve self licensing and it’s the future. To address capital adequacy Dave that’s why we hold PI cover. More importantly because the buck stops with the adviser who is self licensed, the advice is more likely to be conservative and appropriate. When Suncorp closed their in house dealer group one such adviser said it was too risky to become self licensed because of the strategies they were employing and opted for a large AFSL. Over the coming years the only advisers left in advice groups with 200 reps will be older advisers hanging out for BOLR and retiring and those whose compliance history is so poor they can’t find a home. The regulatory burden line is just crap spun by dealer groups. My compliance is better and I have more support now being self licensed than I had with an AFSL with over 100 reps in it.. I have more time and my costs are lower. Initially it was just me and now we’ve formed a co-op of small advisers and we all now work together.
well said, self licensing is the future and it would be in asic’s interest to allow well qualified and experienced advisers to become self licensed, they will in turn give appropriate advice in the client’s best interest which was the intended outcome of FOFA and various other reforms
advisers will then truly be independent and respected as we do not have overlords telling us which platform or product to push
only then we will be truly regarded as a professional, and profession and accepted as such by the public
Dave is the responsible manager and holder of an AFSL btw
dealer groups have a vested interest in ensuring advisers do not become self-licensed
well I have news for the dealer groups
1. vast majority of advisers are going to find it a challenge to operate profitably post 2019 and post 2024, and many will exit
2. those of us who are very well qualified (multiple masters degrees) will become self licensed and operate that way, under our own AFSL
so if you have an AFSL you should be worried, very very worried, as your days are numbered
I’m not sure that’s right. There is no bigger problem with the large AFSLs than the fact that they were and still are run by the wrong people! If AFSL Management do not have advice experience and qualifications then the poor Advisers are stuffed. Licensed Advisers are responsible and at risk, but when the people directing them are not licensed they risk nothing. If you check the background of most big AFSL management you will find their backgrounds are grossly inadequate to supervise advice. Now we are going to have BEAR and there would be no need for that but for this issue.
Deen Sanders certainly agrees with you. Providing support services to all these new AFSLs is exactly what he’s off to Deloittes to do.
And it starts! If AMP is looking for someone or something to blame then is should find a really big mirror.
Is this the outcome that ASIC want. 1000’s of AFSLs popping up with inexperienced responsible managers and no requirement for capital adequacy to protect their clients. How will ASIC monitor and supervise all of these small AFSLs who will soon find keeping up with the regulatory burden a time consuming nightmare.
Large institutions don’t factor the planning businesses into the capital adequacy ratios that I think you are referring to. Also, if you listen closely to the current CBA radio ads, it states that CBA Financial Planning is a subsidiary and non-guaranteed business of CBA. Protecting clients is done via good governance and Professional Indemnity.
better small afsl’s than the current dealer group model which is the biggest hindrance to delivering quality advice that is compliant to the public.
dealer groups must go
@ Dave is an AFSL Holder and responsible manager so he says stuff to suit his personal position
it is in ASIC’s and the public’s interest to ensure a viable self-licensed IFA sector. only an independent, robust IFA sector can challenge the might of the large institutions and product makers whose ultimate aim is to jam people into products
then continually say sorry, and enter into EU’s which to them is a cost of doing business
Oh Michael you are so right. AMP’s ( and they aren’t alone at either VI or independent levels ) on-going service packages have more often been no more than smoke and mirrors and hopefully the RC will ask the right questions to expose this. Asking the right questions is the key to relevance and honesty in answers.