Independence important - but support critical
With one-stop-shop and non-aligned dealer group Yellow Brick Road (YBR) recently announcing plans to recruit wealth professionals disenchanted with the institutional environment, the value and definition of independence is again in the spotlight.
In a statement, YBR said it was looking to hire professionals to work flexible hours, who want a "refreshing alternative to the institutional jobs offered by the major banks" and who want to "provide agnostic, independent financial advice to Australian consumers" - with independent in this case meaning "non-bank" rather than the regulator's designation pertaining to remuneration models.
YBR chief executive Matt Lawler said the group is receiving a lot of enquiries from current bank employees involved in a restructure or in situations where their remuneration has changed, or they have been pigeonholed into selling products rather than giving advice.
Consumers are also drawn to strong brands but don't necessarily have the same level of trust in big banks as with other brands, he added.
"We're providing an alternative … for people who want to control their own destiny, where their hard work and effort is rewarded. Many financial professionals today have a great amount of experience but [are questioning] the traditional model of sitting at a desk from eight to five every day."
Managing director of Securitor and Licensee Select at BT, Matt Englund, says the current mood within the group is "fantastic" as advisers emerge from a period of uncertainty.
This is backed by recent Wealth Insights research that shows adviser sentiment has improved significantly over the past six months.
"[Our planners are] so enthusiastic that they're supported by and are partnered with a large institution - they love it. They see this period of change [navigating Future of Financial Advice regulations] as a great opportunity to partner with somebody with the resources to support them through the things that are going on," he said.
"Independently minded business owners need to have the freedom to run their own businesses but they need to have the support from somebody with the resources to do the things that need to be done."
For planners running a small business under the Securitor licence, "ultimately it's their asset, it's their client base and their business," Englund said.
"We do have very specific rules about quality of advice and we do have constructs around APLs (approved product lists) but our APL is quite broad - it's not about product, it's about the quality of advice and practice development and support to help run a profitable, saleable business," he said.
The director of self-licensed practice Waterfall Way Associates, Dacian Moses, agreed the idea of having the support of a large licensee in navigating regulatory change was appealing, but also said clients considered independent advice important.
This is also evidenced by the institutions employing multiple brand strategies in an attempt to capture that market, he added.
"You can't have it both ways - you can't say [that brand] is 'standing behind you', then try and represent that you're independent," he said.
Moses said he was happy with the regulator's definition of "independence", even though the requirement to be purely fee for service and receive no volume bonuses meant many boutiques did not qualify.
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