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.
Thanks for the comment Ray, we are aware of Fortnum, but we are confident we will be more affordable as we plan to be a not for profit mutual.
At least this way everyone has some skin in the game. The Dealer Group component then must deliver services to make this work and the Advisors must work to deliver from their existing clients as well write new business.
I thought years ago this would happen that Financial advice firms would become like Accounting firms.
It’s a good model and has been around for a long time.
It is already operating successfully under Fortnum Private Wealth.
I shall watch this with great interest