Institutionally-aligned advisers have slammed ASIC’s plans to re-label them “restricted”, with opposition also coming from some unexpected quarters.
Responding to the news that ASIC has flagged the possibility of adopting the UK regulatory model in Australia, a number of advisers took to the AFA LinkedIn page to voice their discomfort with the controversial proposal.
“I do not believe that I am "restricted" and certainly do not believe that my business is "owned" in any way,” said AFA board member Deborah Kent – an authorised rep of NAB-aligned group Garvan – adding that the “lobbying hasn’t started yet” on this issue.
Guardian Advice authorised rep Sam Perera of Perera Crowther and Securitor adviser Melissa Crawford of 19Thirty both made the point that the term “restricted” was not an accurate reflection of the open APLs offered by their licensee and assumed a conflicted relationship with the parent companies (Suncorp and Westpac respectively), which was seconded by numerous other commenters.
Institutionally-aligned bodies are not the only opponents of the “restricted” label, however, with the Boutique Financial Planners lobby group – a longstanding critic of vertical integration – penning a submission to the FSI which argued Australia is not ready for such a distinction.
"Any move to more clearly identify 'independent' and 'restricted' advice along the lines of the UK model, which deals with the issue in terms of what in Australia is referred to as the 'approved product list', will not work in Australia without changing the existing legislative description of what 'independent' means," the BFP submission states.
Speaking to ifa, FPA chief executive Mark Rantall said that while the association is still formulating its policy responses to the various FSI submissions – including ASIC’s – the term “restricted advice” may go too far and not be appropriate in the Australian context.
By contrast, AIOFP executive director Peter Johnston welcomed the move, claiming that the “nine-year reign of institutions duping/confusing consumers into believing that their distribution channels are ‘independent’ is coming to a close”, but – like the BFP – added that the definition of independence will need to be re-addressed in order for the proposal to work.
Dealer group Infocus Money Management – which completed an MLC share buyback in March – has also welcomed ASIC’s proposal, mentioning the “restricted advice label” specifically.
“Making the ultimate holding company of a Licensee clear for consumers will enhance consumer understanding of their advice and product relationships,” said Infocus director Rod Bristow.
Would you be comfortable describing yourself as ‘restricted’? Have your say below
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