Lobby groups representing different segments of the non-aligned community have voiced disagreement over the definition of independent advice.
In a submission to the parliamentary joint committee inquiry into adviser standards, the AIOFP argues that the legal definition of independence should be reviewed in order to shift focus to the problems associated with product manufacturer-owned advice channels.
“With the imposition of FOFA we believe it is time to change the definition of ‘independence’ under section 923A,” the submission states.
“The current definition does not allow the differentiation of independently owned advisers from the institutionally owned/aligned which significantly contributes to consumer confusion.”
The AIOFP argues that an adviser should be able to describe themselves as independent if they operate their own AFSL, have no ownership by a product manufacturer, operate on a “genuine fee for service basis” and only receive research from “non-conflicted sources”.
However, in an upcoming article for ifa magazine, Independent Financial Advisers Association of Australia (IFAAA) president Daniel Brammall argues in favour of the status quo.
“The law is very protective of the word ‘independent’ when used by a financial planner because the law knows how powerful that word is,” Mr Brammall writes.
“There is a misguided view that if an adviser isn’t aligned with an institution then they are independent – if that were true then by this definition Storm Financial was independent.”
Mr Johnston and Mr Brammall – as well as Boutique Financial Planners president Dacian Moses – will be debating the definition of independent advice at a networking event at The Orient Hotel in Sydney on Wednesday night. For more information email [email protected]
The regulator has banned a financial adviser for five years and cancelled his firm’s AFSL. The Australian Securities ...
The lack of visibility and consistent regulatory instability are stopping prospective talent from entering the advice ...
The introduction of Rhombus Advisory has caused a shift in the top advice licensees as Insignia separates its advice ...
Never miss the stories that impact the industry.
Get the latest news! Subscribe to the ifa bulletin