Financial advice: Only 124 independent financial advisers in Australia



Note: This article is updated regularly when new financial advisers join the independence club (latest update October 2018). A financial adviser does not have to be a member of the IFAAA to join the SuperGuide list, provided they can declare that they satisfy the requirements of being an independent adviser (we now have 3 categories). Anyone seeking an independent adviser needs to conduct their own research on whether an adviser is truly independent – this article will help you with this research.

One of the promising developments from the financial advice reforms is the proposal to establish a public register of financial advisers, including employee advisers, which consumers can access to check the adviser qualifications and whether the adviser is licensed. It appears the register will not disclose whether a financial adviser is ‘independent’.

Until the government or the financial advising industry creates a comprehensive list of financial advisers that consumers/investors can use to verify the professionalism of an adviser, his or her qualifications, the ownership of the advising firm and an adviser’s independence, I anticipate that SuperGuide will continue to publish this unique list of 124 independent advisers. We hope that many more independent advisers will come forward, or choose to move into the ‘independent’ category.

Does Australia really only have 124 independent advisers?

Before you ask the obvious question, let me say, we have asked the same question: How do we know that the 124 advisers in the SuperGuide list are the only independent financial advisers advisers in Australia?

Well, we don’t! We know anecdotally that there are plenty more independent advisers working away in adviserland. At least we’re hoping that in a country of 25 million people that there are many more independent financial advisers working away for their clients too busy to have time to register for this very exclusive list.

Let’s hope SuperGuide’s updated publication of the ‘group of 124’ inspires other independent advisers to make themselves known (if they exist), or inspires others to become truly independent.

Open invitation to independent advisers

Background: Way back in February 2010, we published a list of 14 independent advisers which triggered much controversy and angst from the financial services industry, and fromSuperGuide readers. In April 2011, SuperGuide was at it again, and the number of truly independent advisers in Australia had halved – to 7! In February 2012, for the third year in a row, we published an updated list of 9 truly independent advisers.

In June 2012, we again published the updated list of independent advisers but we split the types of independent advisers into 3 categories: more on those categories later in the article. As at October 2018, we now have 124 independent financial advisers on the SuperGuide list.

Since June 2012, we have slightly changed the process involved in compiling the SuperGuide list of independent advisers because we essentially have two definitions of independence:

  • The Corporations Act 2001 definition of ‘independence’ which allows advisers to charge asset-based fees

  • The IFAAA definition of independence, which excludes those advisers who charge asset-based fees.

We have also published an open invitation to all independent advisers to contact SuperGuide. We will add the names of the independent advisers to the SuperGuide list, subject to the adviser declaring they satisfy each limb of the independence requirements.

Note: The adviser will not need to be a member of the IFAAA to join the SuperGuide list (see end of article for link to invitation and for form to sign). The IFAAA has a stricter definition for independence than the independence definition contained in the Corporations Act. We have a second category for those advisers who satisfy the stricter IFAAA definition but choose not to be a member of IFAAA. We have also created a third category for those advisers who satisfy the Corporations Act definition of independence, which means they may also charge asset-based fees.

What does an IFAAA independent adviser look like?

According to Daniel Brammall, President of the Independent Financial Advisers Association of Australia Limited (IFAAA), the IFAAA receives quite a few calls from financial advisers seeking to be members of the association, and Brammall sends out plenty of application forms.

“In spite of all the conversations I have with advisers interested in joining, so far these members [53 advisers in the updated list below] are the only ones who have successfully passed the IFAAA’s Gold Standard of Independence test,” says Brammall.

According to Brammall, the three requirements for the IFAAA’s Gold Standard of Independence are:

  1. You can’t be affiliated with a bank, insurance or investment company (that is, a product manufacturer).

  2. You can’t receive commissions of any sort – including insurance commissions – unless you refund them in full to the client.

  3. You can’t charge asset-based fees (that is, a percentage of client assets under advice or under management).”

Independence remains an issue

Although the ban on commissions for future retail investment products (including managed investments, superannuation and margin loans) is history making (effective since July 2013), the question of independence (or lack of) remains an issue beyond July 2013.

In the past I have made the comment that I have found the debate surrounding commissions and ownership and independence of financial advice rather depressing because the Government and financial planning industry and commentators were trying to change the industry from the bottom – dragging the worst advisers (in terms of independence) to a level that was a little bit better than ‘worst’. I stated that such an approach was destined to countless setbacks (and ultimately failure) because the broader financial planning industry as it is historically structured is a product distribution model rather than a financial advisory model.

Real change to be driven by advising industry

Even so, real change will only occur when financial advisers drive the change rather than having the Government and regulator drag reluctant advisers kicking and screaming into a new professional business model. Initially, the leaders of the financial advising industry read the signs and were making the right noises (‘higher quality advice’ and ‘more professional industry’), although many backpedalled on significant reforms, in particular, the requirement to ensure a client periodically (every 2 years) agrees to remain a client (the opt-in rule) of the adviser. The original reform announcement referred to an opt-in after every 12 months, and then extended to every 2 years. Under the former ALP government, the final reform version for the opt-in requirement meant that some advisers won’t even have to participate in this compliance requirement, provided they are bound by a code of conduct approved by ASIC. And now we have a Liberal government that tried to remove the opt-in requirement completely, but was stymied by the Palmer United Party.

This irrational opposition from the broader financial services industry is disappointing for consumers and for younger people considering financial advising as a career. In my view, we need to reward the advisers who are operating in the best interests of clients right now – structurally, operationally and ethically.

The relatively new organisation – IFAAA – can differentiate the truly independent licensed advisers from the thousands of advisers who accept commissions and/or are employed or incentivised by the product distributors (typically the major financial organisations).

Note: Although financial reforms took effect from July 2013, existing commission arrangement and incentive schemes will continue to operate indefinitely, and independence, and conflicted advice, will be a constant struggle for the financial advising industry.

What does ‘independent adviser’ mean?

So, what do you need to possess in the way of skills and independence to make this exclusive list?

I interviewed Matthew Ross at the time we published the original list of 14 independent advisers (in February 2010), and his comments remain relevant. According to Matthew Ross, who is a member of the IFAAA, the list of independent advisers “satisfy the Corporation Act’s definition of independent (see s.923A) which is basically no commissions, no charging fees based on volume of product sold or advised on, and no affiliation with any product manufacturer.”

Ross explained that 80% of all authorised representatives are aligned with a product manufacturer, which precludes them from describing themselves as independent. He said: “Of the remaining 20%, a large slice of them pocket commissions (on insurance and/or investments) or charge their fees as a percentage of your assets, which is commissions by another name.”

Ross argued that the big push by planners to drop commissions but to charge fees as a percentage of assets under management is simply commissions by another name. Ross said that the asset fees are usually collected through a platform, which is not considered a ‘financial product’ under the legislation, and it means the financial adviser can then describe themselves as independent.

“The issue isn’t the word ‘commission’; it’s the concept of an incentive and no matter which way you look at it, when you are paid a % of anything, there is an incentive. Incentives result in zero independence,” said Ross.

Note: Effective since 1 July 2013, every financial adviser is subject to a statutory fiduciary duty to act in the best interests of a retail client. What this means is that a financial adviser is required to place the best interests of a client ahead of their own when providing personal advice to retail clients.

IFAAA – point of difference

The IFAAA promotes itself as the ‘gold standard’ of independence of financial advisers. Quoting directly from background IFAAA information:

Existing industry associations do not provide genuine independence. They represent the eighty-five per cent of financial planners associated with product manufacturers who receive commissions. According to the ASIC the typical financial planner acts as a “sales force for financial product manufacturers” and that advisers are “a product pipeline”. This is who the current industry associations are representing. Not one of the main four planner associations represents the interests of truly independent advisers whose interests are aligned with their clients.

According to the association’s background material, the IFAAA aims to solve the definition of independence and promote the value of independent advice to the consumers, to train and develop independent financial advisers, and to represent the interests of its members to government.

Membership of IFAAA

For a financial adviser to become a member of the IFAAA they must agree to the following:

I declare that I am genuinely independent and acknowledge the restrictions of the use of the term ‘independent’ under s 923A Corporations Act (2001).

  • I avoid all real and perceived conflicts between my interests and my client’s interests.

  • I do not receive commissions for my client purchasing a financial product.

  • I do not receive payment or inducements to recommend financial products to clients.

  • I do not have in place any fee structure that means I will not be paid unless my client purchases a financial product.

  • I declare that I have an interest in promoting and encouraging the professional development, independence and concerns of financial advisors.

  • I acknowledge that membership is contingent upon payment of an annual membership fee as determined by the Board from time to time.

Financial advisers are not the only experts who can provide independent advice. Accountants, lawyers and other independent professionals can become ‘associates’ of the IFAAA.

Group of 124 (53 + 49 + 22) – the list!

SuperGuide publishes, and intends to regularly update, a list of three categories of independent advisers:

those advisers (and AFSL holders) who are members of the IFAAA

  • those advisers (and AFSL holders) who satisfy the IFAAA independence requirements but are not members of the IFAAA

  • those advisers (and AFSL holders) who satisfy the independence requirements under the Corporations Act but may charge asset-based fees, which means they don’t satisfy the additional IFAAA requirement of only charging fees based on hourly rates or retainers.

IFAAA members – independent advisers

According to the IFAAA, as at October 2018, there are 53 independent financial advisers in Australia who are also members of the IFAAA (satisfy the independence requirements under section 923A of the Corporations Act 2001, plus only charge hourly rates or retainers for services). The names of these independent advisers are:

ACT

Daniel Brammall -Brocktons Independent Advisory

Naomi Horobin - Clover Financial

Susannah Kulincevic - Brocktons Independent Advisory

Phil Thompson - Rise Financial

NSW

Richard Barber - Liquidity Independent Advisers

Stuart Barber - Liquidity Independent Advisers

Phil Davies - Liquidity Independent Advisers

Alex Electra Frost - Electra Frost Accounting

Fergus Hardingham - FM Financial Solutions

David Harper - Naked Wealth

Philip Harvey - Construct Wealth

Vince Lam Plutus - Financial Guidance

Deborah Lin - Liquidity Independent Advisers

Daniel McGregor - Wealth Train

Michael Morrison - M Financial Planning

Jo Anne Nelson - Arc Financial Solutions

Stephanie O’Connor - Custom Accounting

Howard Pitts - Arc Financial Solutions

Michael Radalj - Your Private Advisers

Bill Raffle - Bennelong Private Wealth

Peter Surtenich - Suetonius Wealth Management

Katie Whiffen - The Retirement Blueprint

QLD

Justin Brand - Brand Financial

Aaron Crosthwaite - McMasters’ Financial QLD

Keith Henderson - Malibu Wealth Advisory

Philip Layton - Independent Wealth Management

Michael McNee - Darling Downs Independent

Todd Meynink - Asset Science

Guy Rasmussen - Whole Wealth

Neil Salkow - Roskow Independent Advisory

SA

Cameron Foster - Horizon Advisory

Jacie Taylor - Periapt Advisory

TAS

Jane Clark - Jane Clark Financial Management

Anton Diedericks - Well Advanced Financial Advisers

Simon Duigan - Core Independent Financial Advice

VIC

Dominic Alafaci - Collins House Private Wealth

Trent Alexander - Financial Planning Expert

Ashley Arandez - Diverse Advisers

Adriano Donato - Roskow Independent Advisory

Sean Dwyer - McMasters’ Financial

Rick Horvat - Horvat Financial Advisors

Brook Logan - Logan Financial Advisers

Dennis Maddern - Maddern Financial Advisers

Matthew Ross - Roskow Independent Advisory

Amir Salehi - Planning Wealth Independent Advisory

Jason Smith - Think Independent

James Stephan - Stephan Independent Advisory

Joe Stephan - Stephan Independent Advisory

Chris Thoms - Super Focus

Berivan Yilmaz - McMasters’ Financial

WA

James HarperOak Advisory

Peter HumbleRise Wealth Group

Christopher YoungCY Financial Advice

Independent advisers who satisfy IFAAA membership rules, but are not members of IFAAA

As at October 2018, we have 49 advisers who have requested to be on our list of independent advisers, and who satisfy IFAAA member rules, but who are not members of the IFAAA (second category of independent adviser).

The advisers listed below have declared that they satisfy the three limbs of independence required under the section 923A of the Corporations Act 2001, and only charge hourly rates or retainers of services:

NSW

Gavin Beecroft - Quantum Financial

Christopher Dorian Browne - F.D.Browne & Co

Harry Buckeridge - Providence Wealth Advisory

James Cruz - Evolution Financial Planning

Ben Liddicoat - BBK Financial Planning

Bill Mackay - Quantum Financial

Claire Mackay - Quantum Financial

Tim Mackay - Quantum Financial

Michael Ogg - Providence Wealth Advisory

Grant Patterson - Providence Wealth Advisory

Adrian Pinkewich - Now Accounting

William Porter - Providence Wealth Advisory

Carlo Queddeng - Providence Wealth Advisory

James Smith - Providence Wealth Advisory

Kevin Smith - The Professional Super Advisers

QLD

Crystal Bobir - Tupicoffs

Rocco Costa - Tupicoffs

Joanne Dale - Tupicoffs

Caleb Dozzi - dozzi Financial Advice

Ellie Fordham - dozzi Financial Advice

Jayne Graving - Arch Financial Planners

Simon Hepple - Tupicoffs

Glenn Hilber - Precision Wealth Management

Lachlan Kendall - Tupicoffs

Neil Kendall - Tupicoffs

Peter Lee - Roskow Independent Advisory

Ross McConachie - Tupicoffs

Mark Milner - Tupicoffs

Mark O’Flynn - Tupicoffs

Tony Sandercock - we talk money

Cynthia Sercombe - Tupicoffs

Samuel Turrisi- Roskow Independent Advisory

SA

Scott Dawson - Wotherspoon Wealth

Samantha Harrison - Wotherspoon Wealth

Oliver Temme - Wotherspoon Wealth

John Wotherspoon - Wotherspoon Wealth

Simon Wotherspoon - Wotherspoon Wealth

VIC

Tom Barlow - Roskow Independent Advisory

Stephen Farrell - Guided Wealth

Melinda Hedges - Priority1 Wealth Management Group

Mathew Horvat - Horvat Financial Advisors

Rudolf Horvat - Horvat Financial Advisors

Corin Jacka - Priority1 Wealth Management Group

Peter Morrison-Dowd - Aspect FP

Stephen Murphy - Advice Services Australia

Matthew Perry - Lilliputian Financial Services

Graham Stewart - Roskow Independent Advisory

Kirsten Townsend - Roskow Independent Advisory

WA

Dennis Barton - Andep Investment Consultancy

Independent advisers who are not members of IFAAA, and may charge asset-based fees

As at October 2018, we have 22 advisers who have requested to be on our list of independent advisers, and who are not members of the IFAAA, and who fall into the third category of independent adviser, that is, may charge asset-based fees, and other advisers operating under the same AFSL may charge asset-based fees.

We suggest you check with the adviser directly regarding asset-based fees.

The advisers listed below have declared that they satisfy the three limbs of independence required under the section 923A of the Corporations Act 2001 (refer earlier in the article):

NSW

Nigel BakerArch Capital

Ben SmytheMinchin Moore

Jack TidswellExceptional Financial Planning

QLD

David LanePitcher Partners Wealth Management

Jeff LeminAspire Financial Consulting

Alex LukashenokAspire Financial Consulting

Richard MeyersPitcher Partners Wealth Management

Ben TraversPitcher Partners Wealth Management

VIC

Sue DahnPitcher Partners Investment Services

Marcus DamenPitcher Partners Investment Services

Kellie DavidsonPitcher Partners Investment Services

Matthew DonatKoda Capital

David Gemmell50Plus Wealth

Andrew GillonPitcher Partners Investment Services

Michelle HeffernanPitcher Partners Investment Services

Victoria LindoresPitcher Partners Investment Services

Brendan PeacockPitcher Partners Investment Services

Chris ReadPitcher Partners Investment Services

Adam StanleyPitcher Partners Investment Services

George van DeventerPitcher Partners Investment Services

Farren WilliamsKoda Capital

WA

Scott StanleyRichmond Private Wealth

To speak with an independent financial planner in Brisbane, please contact Whole Wealth on 07 3535 0694 or info@wholewealth.com.au.

#independentfinancialplanners #independentfinancialadviser #independentadvice

 ©2016 WHOLE WEALTH

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