The beauty of diversity
‘There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy’.
Like Hamlet, I believe that we are only scratching the surface when it comes to innovative ways to meet the advice needs of Australians in a manner that is sustainable and fulfils our ethical and legal obligations.
There seems to be a very large – or at least very vocal – group who believe that any adviser associated with a product manufacturer is influenced by this commercial arrangement and therefore compromises the quality of the advice they provide. Whether they are Corporations Act independent, 'independently minded', independently owned (whatever that means) or simply self-licensed, it seems this cohort feel advisers who operate under a licensee or are partly owned by a financial institution aren’t capable of putting a client’s best interests first.
Well, they’re very much entitled to their opinion but I for one think that it’s wonderful that consumers have a diversity of business models to choose from when it comes to receiving quality financial advice.
This is where I seem to be quite different to many independent planners and their consultants, as they seem to insist that I should be like them. I am, however, quite happy that they are not like me.
But what about my business, I hear you say. Some disclosure is in order. I share ownership with ipac, a wholly owned subsidiary of AMP. Ipac first invested in our firm more than a decade ago so it could grow its advice business. For me, it meant a way to access capital in order to grow but also to achieve scale in order to pass on these benefits to our clients in the form of additional services and lower prices.
With my business partners and our team members, we’ve been able to build an award-winning financial advice business that we’re all very proud of. A business that expanded the operation of one of Australia’s recognised innovators in financial advice, ipac, through investment from one of Australia’s oldest and most respected public companies, AMP.
This has allowed us to grow and provide an environment that attracts world-class Certified Financial Planners and provides opportunity to specialise in advice areas that satisfy their professional ambitions. We can now provide better career options for our team members. Most of all, I’m proud that this arrangement has provided benefits to our clients resulting in Net Promoter Scores of nearly 80 per cent.
Despite these great results, I’m aware that in the eyes of some of my peers, the fact that I have a for-profit financial institution as a business partner means I might be somehow compromised in my ability to meet my professional obligation to my clients.
They couldn’t be more wrong.
Does this mean that I have conflicts that independent businesses don’t have? Of course it does. Can these conflicts be managed? Of course they can. Equally, independents have conflicts that I don’t have and I’m pretty sure they can manage those too.
That’s the point many seem to miss when talking about professional and business conflicts – you always seek to minimise them but you will never completely eliminate them. The key is to have a clear process for those remaining conflicts that means you can manage them in a way that ensures you fulfil your ethical and legal obligations to your client.
The majority of our country is yet to receive positive, life-changing financial advice and this very fact in itself shows that existing business models are not meeting their needs. I’d encourage the entire advice community to continue to dream big and create these new ways, rather than criticise each other for our imagination and innovation.
Patrick Canion is chief executive of ipac Western Australia
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