The Independent Financial Advisers Association of Australia’s president has had an AFSL approved by ASIC, paving the way for the country’s first “genuinely independent dealer group”.
IFAAA president Daniel Brammall will be the responsible manager for the new licensee – to be named Independent Financial Advisers Australia – and is in the process of transitioning his Canberra-based practice Brocktons Independent Advisory across to the AFSL.
Speaking exclusively to ifa, Mr Brammall said the move will cater to those advisers who want to adhere to the Corporations Act’s definition of independent advice but are not willing or able to get their own licence.
“Financial planners approach us all the time to talk about how becoming independent will impact on them professionally and what steps are necessary to achieve genuine independence as an adviser,” he said.
“Their concern is that even though they might follow the principles of independent financial advice, and in some cases even satisfy [section 923A], their AFSL still permits other advisers to charge asset fees and receive commissions.
“It’s because of this that they can’t call themselves ‘independent’, and if there’s a scandal involving one of their conflicted colleagues then they’ll be dragged through the same mud.”
Mr Brammall said that while it is cheaper to self-licence now than in the past, that it is not the right path for all independent advisers and can be a “major distraction” from client service provision.
The new dealer group will be unique in that asset-based fees and commissions on all products – including risk and life insurance – will be banned for IFAA authorised representatives.
“There are mid-sized licensees who use the word ‘independent’ in their marketing material but a little digging soon shows that they permit asset fees and commissions, and many of them have their own white label platforms and products,” Mr Brammall said.
“In truth they’re far from independent. That’s where we come in.”
Demand for independent advice is on the rise from both advisers and consumers, Mr Brammall added.
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