While extracting your business from the “incentivisation culture” can be difficult, the Independent Financial Advisers Association of Australia (IFAAA) says the path to Corporations Act-compliant independence is now well worn.
IFAAA president Daniel Brammall – who also heads up ACT-based boutique Brocktons Independent Advisory – told ifa that there are “sacrifices” in becoming a fully independent advice provider in the eyes of the law, but said it is easier now than it once was.
“If you had to be the frontier guy and forge your own path, so hack through the green vines and all the rest of it, then it’s a slow, painful, very dangerous process – there are sabre-toothed lions around every corner, you don’t know whether one’s a deer or one’s a lion,” Mr Brammall told ifa.
“The path is now forged – there are models which exist [with which] people are running perfectly legitimate and perfectly profitable financial planning practices.”
Mr Brammall said the IFAAA does see a place in the market for “product manufacturers who are going to need a distribution channel” but said this conflict needs to be disclosed to clients, with opportunity for referral relationships between institutionally-aligned product advisers and client-facing “impartial advisers”.
The comments come as the IFAAA launches a “gold standard of independence” to direct consumers to Corporations Act-compliant IFAs.
Meanwhile, boutique firm Tupicoffs has announced it has taken the necessary steps to becoming an independent provider under the Act's definition, with managing director Neil Kendall saying the company "owed it to the public".
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