A new equity partnership model licensee has been launched, with its founder saying the model is an alternative to self-licensing and the “broken” traditional dealer group model.
NSW financial advice firms Common Cents and EQ Financial have teamed up to launch Adviser Equity, a new style of licensee that will see authorised representatives become equity partners under a limited liability partnership.
Adviser Equity – which will be launched this week alongside the ifa Business Strategy Day roadshow, for which the business has signed on as an event partner – will be more akin to a legal or accounting firm than a traditional dealer group, its co-founder Patrick McMenamin told ifa.
“The traditional bank-aligned dealer group model of authorising representatives is broken,” Mr McMenamin said. “Our structure allows partner firms to truly be partners and acts as an alternative to self-licensing.”
Member firms will also gain access to an adviser fidelity trust to compensate any clients in the case of inappropriate advice and well-negotiated PI insurance premiums, Mr McMenamin said.
With the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry placing a spotlight on large dealer groups, he said the Adviser Equity model allows advisers to have skin in the game without exposing them to the risks of holding an AFSL.
The company is looking to expand its services for financial advisers.
The FPA has developed a new SOA video toolkit to guide members.
“All advice should be regulated in a similar way”, a financial services firm has argued in its QAR submission.
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