Speaking to ifa, consultant Kate Humphries – who recently departed the Netwealth Advice Group where she had headed the Pathway Licensee Services business – said she has seen increased phone and email activity in recent weeks from institutionally-aligned authorised reps seeking more information about self-licensing.
“While this has been a trend for some time, the frequency of queries has increased and a number of the advisers specifically mentioned the Commonwealth Bank affair,” Ms Humphries said.
Similarly, Frank Smith of Adviser Compliance Services – who also runs the AIOFP’s compliance service – said that in recent weeks he has spoken with three to four advisers per week who ask him whether it is possible to get their own licence, anticipating that this trend may increase.
Financial services lawyer Sophie Gerber of Sophie Grace Compliance has also seen an increase in clients interested in “moving out of institutional stockbroking and financial planning groups”, pointing to the FOFA reform debate as another instigator but adding that there is still some uncertainty remaining.
“A lot of our clients are assessing their current business models but waiting for the outcome of whether general advice is included as ‘conflicted remuneration’ before moving forward,” Ms Gerber said. “It is making business planning quite difficult for them.”
However, Stewart Chandler of Western Australian consultancy AFSL Compliance said he has not seen an increase since the release of the Senate committee report into the CBA affair and performance of ASIC was tabled last month.
“No change for me,” he said. “I have had the same steady flow of enquiries and new applications for the last few years.”
Are you considering self-licensing? editor@ifa.com.au
A BAD EXPERIENCE GONE HORRIBLY WRONG. My advice is dont trust your bank under any circumstances. The CBA were exposed and have since given ground (forced) but our bank was involved in the STORM crisis and still they are involved illegal advice. They have targeted the older retires like us and because we trust in them we are left to civil action with limited resources.
What Peter Wallace said on 2014-07-17 12:09 I fully agree with!
It is ironical but his experience is almost identical to that of my wife and myself! Regrettably in our case it was our rogue bank that provided the introduction to a less than credible bogus adviser, an unsustainable product that failed. Not only destroying our lives but their breaches of the corporations act and fraudulent practices go without retribution.
Goodness me Peter, you sound like an ABC reporter or at least should be on the 7.30 report.
Angelique, there are plenty of options available for those who wish to become self-licensed and there are cut price afsl’s with no institutional ownership. So advisers are clearly voting with their feet. The question is why. From my experience most people look for trusted brands when seeking advice. So I suspect the make up of our profession has far more to do with consumer preferences than adviser preferences.
At the risk of trying to overcome great conflict of interest let me say:
Angelique, you have a point. But do remember that there are corporately employed doctors and lawyers and that there are organizations that bring doctors and lawyers together so they can benefit from shared services. So while who license them is important, so is their training and support. Instititutional advisers often have better support.
Anti V-I. CBA is not the only game in town. And clients have been hurt by bad advice and use of bad products by many so called non institutional advisers- STORM, various tax effective and high yield products supported by independents but rejected by institutions.
How about some frankness?
I am working on robust researched-backed theory and empirical evidence to determine if the majority of financial advisers support or do not support independence from licensees where they are licensed/registered to practice their craft on an individual independent basis rather than institutionally through a licensee as other professionals such as doctors, lawyers and accountants are. The current ASIC licensing system is appropriate for institutions/corporations, NOT individual financial advisers. We need to come up with a better model for licensing INDIVIDUALS financial advisers. Doctors prescribe pharmaceuticals, but they are not licensed to practice their craft through a pharmaceutical company. Accountants sell consulting services through an accounting practice (EY, PWC,etc), yet they are not licensed by the accounting practices. Lawyers work for legal practices, yet it is no the legal practices that licenser them to practice their craft
Thank you Neil for giving a text book definition of the insto adviser/FPA party line. ‘It is all about individual responsibility. It is all about a register of practitioner advisers and the number of bloody cpd points’. So the individual CBA planner goes to jail, his family is shamed, but meanwhile his line manager pockets a million dollar bonus and his boss is appointed to chair a financial inquiry! some are more conflicted than others. you’re just worried because now the clients know about it.
Great headline for the article. Pity the content has nothing to do with it
As for the comments I read, advisers criticising advisers with little foundation is not going to do anyone any good. Just as much damage or more has been done by non aligned or so called independent advisers over the years as by so called aligned or conflicted. advisers.
In this industry of ours, we are all conflicted in some way to some extent. The dfference is about how honest you are with yourself and clients, how you manage the conflict and the outcome you deliver for your client.
Lift the level of conversation from childish accusation or gang style abuse, or we just damage ourselves.
[quote name=”Peter Wallace”]I dealt with a financial adviser for the first time and the last time.I did not know they were merely product floggers.Over 20 breaches of the corporations act and over 5 acts of fraud.Do not expect to be protected by anyone unless you want to pay out money you don’t have for lawyer fees.This adviser happily lives on money he illegally received.I would become a financial adviser to recoup my losses but my conscience and morals don’t allow me to be.My financial advice to anyone is stay away from these criminals.[/quote]
Peter, you really do not yourself or your cause by making such rash statements. Please don’t use ‘logic’ which simply does not stack up. I have been to bad dentists, doctors and motor mechanics – but I don’t use that one experience to cloud my thinking on how others may operate. Please start to practice some conscience awareness.
I dealt with a financial adviser for the first time and the last time.I did not know they were merely product floggers.Over 20 breaches of the corporations act and over 5 acts of fraud.Do not expect to be protected by anyone unless you want to pay out money you don’t have for lawyer fees.This adviser happily lives on money he illegally received.I would become a financial adviser to recoup my losses but my conscience and morals don’t allow me to be.My financial advice to anyone is stay away from these criminals.
When Joe average knows and understands what the term ‘vertical integration’ means, you can be sure that it is going to go the way of the doe doe bird.
Less institutionally aligned advisers and therefore less conflicted advice could be an unexpected “Win” from the CBA affair.
Restores your faith that there are great and ethical advisers who wish to separate themselves from the institutional “pack”.
(I am also sure there are great and ethical advisers who aren’t currently in a position to act this way though).