The official agenda for tomorrow’s second meeting of the industry working group – seen by ifa – reveals Treasury is giving serious consideration to the push to clearly distinguish between institutional alignment and independence on the slated register of advisers
The document reveals that members of the working group – made up of a wide range of lobbyists and representatives from across financial services – will be asked whether they agree to the proposition that specific information about licence ownership be omitted, and whether they believe the issue should be “re-examined in the medium-term”.
It also summarises that “members who do not support inclusion of this information suggest that this issue is a disclosure issue which should not be addressed in discussions concerning the implementation of a register; query how information of an adviser’s independence could be listed on the register in practice; and query whether this type of information goes to the selection of an adviser rather than validation of an adviser”.
Should licensee ownership information be included on the register? Have your say below
Absolutely – yes 100%. I cannot see 1 good reason why it should not be… unless one does not like full disclosure.
Independence is defined in Section 923A of the Corporations Act.
http://www.austlii.edu.au/au/l…
Does this make me brave AJD?
So it’s not purely marketing. It’s real.
YES, the Licensee ownership should be listed on the register. The consumer wants to know if the adviser is or is not working for the BANK or Product Provider. I have worked both sides of the fence, and my clients appreciate the fact that I am working for them and not the BANK/Product provider.
This atarted out being about disclosure, why do we want to pit ourselvers against each other? A good adviser is a good adviser regardless of ownership or alignment. Questions remains, should ownership be disclosed!!! The media, and to a certain extent opposing sides in government love to see us tearing at each others jugulars, lets show a bit of unity, aligned and non aligned.
With regard to the “independence” tag, current legislation states that if you receive, or have ever received, commission (including ongoing/trail) from a product provider, then you cannot call yourself “independent”. You have been tainted. Given that under the new FOFA legislation an adviser can no longer receive brokerage (and any earlier brokerage arrangements have been specifically quarantined), does this mean that from 1/7/2013, such advisers can now legitimately call themselves “independent”?
Guys get real independence is very important let client make the final choice disclose who you are aligned to then they can make the choice.
Im with you Goose. Is anyone on here brave enough to define independent. Independent means what precisely? I’m licensed through a large institution who has no ownership of my practice. I pay them a flat fee. I might start start using the term independent as it is purely marketing.
In this era of Full disclosure, I agree that transparency of ownership will give all consumers the information needed to allow them to decide with whom they ultimately wish to deal with.
Maybe look to bring back the requirement that the licencee branding must be more prominent that the individual business or adviser branding
I just hope that the register doesn’t just show “Garvan Financial Planning” as the licensee but that NAB is the name behind the name…
Greater transparency. It’s a no-brainer.
Just because the licensee is owned by an institution does not mean that the advice business is owned by the institution. Advice business have the choice to be owned by institutions or non-institutions.The licensee just provides services not ownership of advice businesses. If the process of being licensed was not so onerous, most advice businesses may have chosen to be self licensed. Make the process simpler and cheaper to encourage self licensing if that is the better policy option.
yes absolutely, otherwise what exactly is the point of this ongoing debate about independence, disclosure, conflict of interest, clients best interests, differentiation between providing financial services and promoting financial products. Shouldn’t the public have the right to be properly informed about the working group members who are making such decisions?
Licensee (ultimate) ownership should be made absolutely clear on the register for every adviser listed and such information would be simple to produce and keep current.
Each licensee either does or does not have shares owned by a product manufacturer…. and each AFSL either does or does not have financial interests in financial products or platforms offered to clients.
These two simple questions could be answered Yes or No by each licensee for each authorised adviser and false answers should be subject to penalty.
Sincerely,
Peter Mancell
Managing Director
FYG Planners Pty Ltd
As SISFA has been saying for some time, consumers/ investors are demanding to know simply and clearly whether their Advisor is:
(I) really independent & unfettered in their advice OR
(ii) constrained as an agent of one particular organization, where there is essentially an obligation to sell in-house product(wholly or partially).
Surely this is the fundamental basis for a transparent market, Conversely how is it that this transparency does not exist in the current market? No wonder that so many investors are disenchanted with institutional provision of advice.
Advisors are either ‘tied’ or ‘independent’ – there is plenty of room for both – but let us remove the obfuscation
Confirming a licensee’s ownership on the public register of all advisers would not taint that advisers integrity, for there are many fine advisers that work with vertically integrated licensees. What is does ensure though, is that relationship is apparent from the outset for every client that wishes to check their intended adviser is licensed. The CoreData survey results show this is urgently needed.
If we are creating a register of advisers for the benefit of consumers, it goes without saying that AFSL info should be included , given it is one of the more relevant pieces of information in the decision .
Should be disclosed
The Boutique Financial Planners association has, since the inception of FSR, called for the ultimate ownership of an AFSL to be disclosed in all public documents and advertising in those circumstances where a product manufacturer has an ownership interest.
Research consistently reveals the public remain confused about the independence of representatives of institutionally owned or aligned AFSLs. Treasury’s interest in this matter is a welcome development and coincides with disclosure and other adviser related matters raised by Murray’s Financial System Inquiry.
Greg Hunter, Secretary
Boutique Financial Planners
Yes! Licensee ownership should be on the register. Give me one good reason why it should not be on the register? The whole point of the reforms is about conflict and disclosure. Only those who want to hide this fundamentally important piece of information from the client will be concerned. Where this is the case, they should not be giving advice to clients!
Wouldn’t clients want to know who was pulling the strings of the advsier that they are making enquiries about? It makes sense to me, but then again, that’s a practical approach to the situation 🙂
Agree that the disclosure of institutional backing of license is a no brainer but disagree that having institutional backing implies a lack of independence nor the absence of institutional backing implies independence.
Those with nothing to hide and nothing to fear will embrace this full public disclosure. It is also imperative to address the vertical integration problem.
There ought to be full separation of the product maker from the adviser. This too ought to be a “no brainer” to any serious regulation reform, given the systemic compliance failure within banks.
The only planners that will have an issue with this requirement are those that operate through a business name different to their ultimate parent.
Definitely, there should be nothing to hide and all cross ownership should be ethically disclosed to all prospective clients. Cross ownership is not wrong so no one should worry about disclosing it
Disclosure of ownership should be a no-brainer as there is nothing to hide!