Two of the industry’s most influential leaders have joined the independent advice movement, clearing the path for a new generation of female advice entrepreneurs.
In late 2014, I had the honour of being the only male invitee to an AFA Inspire luncheon attended by the industry’s most prominent female execs and practitioners. After several hours of constructive discussion, the consensus was that while great strides have been made in increasing the number of women entering the profession, too few were taking the next step and starting their own practices. The group took on a new mission: to boost the number of “female advice entrepreneurs”.
I suggested that this was particularly true of the independent and non-aligned sector of the market, which is still a business community often stereotyped as a bunch of grumpy old men (with apologies to my many IFA mates across the country). It was agreed that the main reason for this is that the institutions – for all their faults (and there are many) – have been fairly successful in recruiting more women into the profession via their various “academies” and incentives, as well as young people from all walks of life. The IFA sector, by contrast, has often gone about succession planning in a very old-school fashion, with businesses passed down from father to son, mentor to protégé.
In the past few years, the independent sector has continued to grow steadily, aided by the scandals plaguing the major bank-aligned wealth management arms and incidents like the collapse of Genesys and closure of Guardian Advice and Suncorp Financial Planning.
But in order to continue on this upward trajectory and eventually become the predominant Australian financial advice business model, the independent movement needs to evolve so that its growth is not reactionary to external events, but organic and positive. Young advisers and those yet to enter the profession need to be educated about the self-determination and control benefits of being independently-owned, otherwise they will be scooped up by the insto recruitment machines and find themselves part of a sales production line with restrictions on everything from technology use to product recommendation.
That is why it was so encouraging to see the news that two of the industry’s thought leaders – Jenny Brown of JBS Financial Strategists and Peita Diamantidis of Caboodle Financial Services – have taken the decision to become self-licensed, both pointing to a desire to be in control of their own destinies.
Now, to be fair, neither of these ladies hurled grenades at their former licensees or the institutional sector in doing so. To the contrary, both have friendships and allegiances across the industry and are seemingly more interested in professionalism than industry politics. So it is unlikely they will all of a sudden become hardcore bank-bashers just because they have taken this important, personal business decision.
But having said that, taking the often-difficult step of becoming self-licensed contains an implicit argument about the insufficiencies of the dealer group model (particularly those owned by the major product manufacturers).
In order to provide truly innovative services to clients – as both of these firms seek to do – a practice principal must have control over their own processes and procedures, including software and technology use, and of course, the approved product list.
Compared to the insto groups, there is of course a plethora of smaller, non-aligned dealers that will allow you greater choice over these things than the banks will, and will not force or encourage particular products down your throat. But ultimately it is the self-licensed environment that most completely allows the freedom of the independent life.
While their gender does not define them as businesspeople and leaders, both Jenny and Peita were in attendance at that Inspire lunch and hopefully their decision to take greater control of and responsibility for their own business affairs will demonstrate to other women in the industry – as well as all advisers suffering under interventionist dealers – that independence may be a feasible and lucrative option for their business.
By taking this action they have both displayed the courage and conviction required to be an independent service provider and have put some mighty cracks in the glass ceiling in the process.
If you are thinking of going independent, but waiting for the proverbial camel’s back to be broken first, consider this the straw.
Aleks Vickovich is a contributing editor at ifa
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 18 Feb 2019ASIC appeals Westpac best interests court decisionBy Adrian Flores
- 18 Feb 2019FASEA mostly funded by the major banksBy Adrian Flores
- 15 Feb 2019ASIC to undertake harsher penalties against banksBy Eliot Hastie
- 18 Feb 2019NAB most distrusted bank, survey findsBy Sarah Simpkins
- 15 Feb 2019Court restrains unlicensed firm from operatingBy Adrian Flores
- 15 Feb 2019ASIC used Dover whistleblowing to shut licensee downBy Adrian Flores
- view all