In an email to ASIC, AIOFP executive director Peter Johnston said he agrees that the use of the term ‘independently-owned’ by institutionally-aligned firms need to be addressed.
“Independently-owned practices that are licensed by an institution should be banned from using the term. It grossly and unfairly misrepresents themselves to consumers,” he said.
However, Mr Johnston also believes that barring non-aligned advisers from using the term will mean they are being placed in the same basket as aligned advisers.
“This is clearly not in the consumers’ best interests and does not represent the practical nature of the advice options,” he said.
“Due to the impractical aspects of s923A [in the Corporations Act], consumers need a third advice choice to differentiate genuine independently-owned practices from the institutions and their vertically-integrated networks.
“If ASIC decides to ban the term, it will only advantage the institutions with their marketing objective of having all advisers look the same, disadvantage consumers and make commercial life even harder for the genuine independently-owned sector.”
Mr Johnston said while it is natural for consumers to want “truly independent” advice, it can be difficult to obtain as only a few firms offer this.
Therefore, advisers in the non-aligned sector are the next best choice, he said.
“Independently-owned advisers are the most FOFA-compliant. They are now administration/platform indifferent and receive no cross subsidisation revenue unless they offer an SMSF service to clients,” Mr Johnston said.
Actually, Anonymous, quite a few of us are genuinely independent – taking no commissions, selling no products and charging fees for advice that does not require product to me shifted to fund the advice costs. And ONLY those who are independent should be allowed to call their advice “advice”… the rest is dealing. In the old days we had an Advisers Licence or a Dealers Licence. 95% were dealers or licenced under dealers and the few who were Advisers could not accept commissions for selling product. It’s time ASIC reverted to that model of licensing and enforced it so that only those with an Advisers Licence could issue a Statement of Advice or call themselves advisers. If doctors collected their revenue from drug companies for prescribing pills they wouldn’t be doctors… Is it no wonder the public still can’t trust Financial Advisers when almost anyone can use the term and even the word “independent” is still being debated – for heaven’s sake!
Oh dear…Susie Munro from Sixpence Media….not a planner, not an adviser, not a licensee, never been any of these.
I suggest sixpence is all that advice is worth.
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[quote]Oh dear…Susie Munro from Sixpence Media….not a planner, not an adviser, not a licensee, never been any of these.
I suggest sixpence is all that advice is worth.[/quote]
Consumers don’t make the cut in your hierarchy of worthy opinions, eh?
Perhaps that’s part of the problem.
Well said Susie. You nailed it.
Such arrogance in that comment. You have to be an adviser to have an insight do you? He/she will be extinct soon enough. Poor, angry little soul.
This is self serving spin, once there is a bias to use certain solutions institutionally aligned or otherwise is irrelevant. Businesses cannot copy the institutional model of vertical integration a reap the profitability rewards and then hold themselves as proving independent advice as it is clearly not.
What’s the difference between:
(i) an “institutionally-aligned” practice, and
(ii) an “independently-owned” practice that’s part of a non-aligned licensee that has a bunch of white-labelled products on their APL?
Aren’t they both creating and selling products? i.e. vertical integration
They way I see it, if AIOFP’s proposal is implemented, consumers are still left confused, and at worst mislead.
Ha Ha So all these pure businesses out there feel they need to market themselves better to attract customers. It is also in the clients best interest that they disclose to their customers what backing they have if their investment recommendations fail and what steps their businesses take to manage this risk. The irony of this hubbub is that this fuss is all about product when good advice is client centric.
I can’t believe it would take this long for ASIC’s lawyers to answer such a simple question. Maybe ASIC don’t like the answer, or perhaps they are getting some sort of perverse satisfaction from the disruption this is causing?
Doesn’t a term like “non-aligned” achieve the same objective”? Add the words “institutionally” or “product” as appropriate.
So, who is independent nowadays?
Really, lets find something valuable to discuss as this sort of banter is a total waste of everyone’s time.
These firms: http://www.ifaaa.com.au
Are you still recommending [color=red] swimming pools [/color] to clients Matt?