Profession of Independent Financial Advisers and New Financial Adviser Standards
We have some great news that we’d like to share with you.
We are proud to announce we have accepted an invitation to be admitted into the Profession of Independent Financial Advisers. With over 24,000 financial advisers in Australia less than 70 currently belong to this exclusive group.
Who is the Profession of Independent Financial Advisers (PIFA) and what does it mean for you?
To qualify as a PIFA Practising Member, advisers must satisfy these three criteria:
- No ownership links or affiliations with product manufacturers
Impartiality is impossible where an adviser has links to a product manufacturer. Ownership links create an environment where the adviser resembles, at best, a well-intentioned salesperson.
You can be assured we are recommending the solutions that best suit your individual needs and circumstances.
- No commissions or incentive payments from product manufacturers
Commissions are payments made by product manufacturers to their distribution network. They create a conflict of interest between advisers and their clients. By not retaining any commissions we are free to always provide recommendations that are in your best interest, without conflict.
- No asset-based fees
Asset fees, although authorised by the client, are calculated precisely the same way a commission is calculated. Asset fees are incentives that prevent an adviser from being impartial and therefore create a conflict of interest between adviser and client. By charging only flat fees for the service provided we are not influenced as to where your money is ultimately invested.
People should always ask their adviser; do they meet this standard? If not, ask who the adviser is really working for.
New qualification standards
The financial planning industry has been introducing higher education and qualification standards.
Advisers have had some time to meet this standard.
We are proud to say we already exceed the new higher standards required.
If an adviser does not meet the standard, I would ask why not? As they have had some time to do what is required. If they do not, ask them if they intend to meet them.
The industry estimates that at least 40% of advisers will leave the industry in coming years as a result of not meeting the new standards. If an adviser does not meet the new standards there is a good chance, they may no longer be advising in months or years to come.
In an industry still affected by widespread conflict of interest it is important to work with an adviser that is working in your best interest and that will be there for the long term.
Please, if you have friends, family or colleagues who may have questions about this, please get them to give me a call.
Look forward to catching up soon, until then continue to enjoy all the good things and stay safe and well.