In an interview with ifa, MyPlanner Australia managing director Philippa Sheehan said the increasingly popular philosophy of outcomes- or objectives-based advice is less feasible to implement in the institutional environment.
Ms Sheehan – who recently left the IOOF network to head up the non-aligned MyPlanner group – said that while it is “possible” for aligned advisers to provide truly objectives-based advice, that it is “more difficult” within these business models.
“There are other factors and divisions that perhaps come into play when providing advice within that model,” Ms Sheehan said.
“A licensee may say they provide objectives-based advice but then their APL may be limited to the products of the institution that they’re owned by.”
Many institutionally-owned dealer groups maintain a focus on risk profiling or product recommendation, which are not in the spirit of true outcomes-based advice, she said.
However, while greater freedom to pursue this advice strategy may be a benefit of joining an independent group, Ms Sheehan also warned that wannabe IFAs must be prepared for additional costs associated with greater choice.
“There is always that challenge [for licensees] around profitability without product,” she said. “The challenge is for financial planners to understand that if you’re going to move to an independent or privately-owned licensee you are going to have to pay more.”
Sorry Ms Sheehan I do not agree with your comments of Increased costs by changing Licensees , we moved to a privately owned Licensee ( Dover Financial Advisers) and our Fess Reduced by 47% this also provided us with a much much better service and offering to our clients
The client strategy to help them best achieve their goals/outcomes/what the client actually wants to achieve, is nothing new. It just now has a flash new name to make clients think it is new and that it is only available from non aligned advisers, and by the way it will cost more. However the clients strategy always comes first, even aligned advisers can, and do, get this part right.
After the outcomes are agreed and the strategy to reach them determined does the adviser consider what, if any, products may be required to reach the clients outcomes.
TO me this sort of thinking doesn’t depend upon the advisers alignment or non alignment, it is dependent on the advisers skills, knowledge and experience.
This would indicate that it is an achievable outcome for the client under any adviser model.
objectives based advice has nothing to do with product choice if you have control over asset allocations. The same strategies are available to any adviser.