AIOFP talks to super funds on third-party advice
The Association of Independently Owned Financial Professionals (AIOFP) has told members it has been in ‘deep discussion’ with industry superannuation fund management teams about providing third-party advice services to their funds.
AIOFP executive director, Peter Johnston has used a message to his members to say that most of the funds his organisation has spoken to are seriously considering the third-party approach.
“With Institutions largely out of advice thanks to the Royal Commission, we need to give them a simplistic solution to inform their constituents/members of product information without the need to be licensed. The last thing consumers would want is Banks back into Advice, history strongly suggests they are not very good at it,” Johnston said.
“We cannot go back to the 1990’s of Institutionally aligned Advisers masquerading as Independent Advisers confusing consumers. Who ever thought of the ‘Qualified Adviser’ concept is either naive or trying to return the industry back to those ugly highly conflicted s923A days where consumers were the greatest losing stakeholder.”
“Recently we have been in deep discussion with several Industry Super Fund management teams to provide a third-party advice piece to their fund. Interestingly, most are seriously considering retaining only inhouse trained staff to service members with product information and outsource the independent advice to professional advisers if the Minister selects this solution. “
“This model provides an immediate saving to the Fund with trained staff on circa half the cost of licensed advisers, it eliminates the AFSL costs/risks for management and inhouse trained staff can study part time if they want to become a licensed Adviser. The other benefit for the Fund is new inflows from the Advice industry.”
“The benefit for members is massive cost savings and therefore higher account balances.”
“This model can be implemented quickly and cost effectively for Super Fund member’s benefit but of equal importance it emphasises the primal differentiation in our industry where product and advice must be entirely separate functions,” Johnston said.
God help the industry fund clients if the AIOFP get their hands on them
Interesting comments!!.
Care to elaborate?
Or are you just another ex-FPA member
Not at all an ex FPA member. My opinion of the people who run the AIOFP and the members they represent is not high. I do not believe they have a good track record of quality advice or representation in a coherent manner
It is a dilemma isn’t it?
On the one hand we have FAAA which is run by mostly competent, well intentioned people, but suffers from poor organisational credibility due to product company relationships and special treatment of “grandfathered” CFPs.
On the other hand we have AIOFP which doesn’t have the same organisational albatrosses, but does have question marks around key people.
Of course this raises the question of why haven’t the competent well intentioned people running FAAA gotten rid of product company relationships and grandfathered CFPs? I don’t know the answer, but suspect it may be due to pressure from old timers and product company puppets on the FAAA Board.