Independent advice focus of new study

A new project will examine the value of independent advice and seek to determine the number of Australian financial planners that consider themselves to be independent, as well as gauge consumer demand for their services.

FSI Consulting director and project founder Brett Walker said that although the Corporations Act offered a restrictive definition of what it meant to be “independent”, “unbiased” or “impartial”, no reliable data existed on the number of advisers who provided independent advice or the level of consumer demand for such services.

“Everybody has a feeling that there would generally be quite good public demand for that kind of service, but at the moment it’s really anyone’s guess how many independent advisers there are out there,” he said.

To be considered independent, according to the Corporations Act’s definition, advisers must rebate all commissions received in full to their clients.

Walker said the project would identify advisers who were independent, or wished to be so. It would then analyse the business to confirm it met the tests of independence.

“The methodology is about helping people to understand what the section [of the Act] means and helping them review their business and achieve independence through, if necessary, adjusting how they operate,” he said.

According to Walker, by publicising their independence, advisers would “stand out from the crowd” in an environment where they lacked the marketing resources available to larger institutions.

Walker said the project also aimed to determine public opinion on the value of seeking independent advice.