Risk-focused dealer group Synchron has joined the Association of Independently Owned Financial Professionals (AIOFP) to better lobby against ‘churning’ and vertical integration.
“We felt that as a licensee we needed to align ourselves with like-minded licensees that operated in the non-institutional space,” said Synchron managing director Don Trapnell.
Synchron will retain its “very strong and close association” with the Association of Financial Advisers (AFA), said Mr Trapnell.
But he added there is a “disconnect” between institutionally owned licensees and the advice model of non-institutionally owned licensees.
“We felt as a licensee that our interests weren’t being protected well enough either at the government level or in the marketplace in general,” he said.
The issue of ‘churning’ has been rekindled by the Financial Services Council (FSC), which is under pressure by the government to self-regulate on the issue, said Mr Trapnell.
But there is no meaningful statistic that has been produced that shows there is a “culture of churning” in the advice industry, said Mr Trapnell.
It is not in the interest of an institutionally owned licensee to challenge the idea that churning exists, he added.
“If you’re an institutionally owned licensee your owner is a member of the FSC, and they have an interest in promulgating the myth that we have a culture of churn in our industry,” said Mr Trapnell.
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