ifa reported in October 2016 that ASIC is seeking external legal advice to determine whether it should prohibit firms from calling themselves ‘independently-owned’, unless they meet the legal definition of independence.
Speaking to ifa, Mr Hoyle said he believes changing the interpretation of the definition could be detrimental for the industry and consumers, as it may hinder the movement away from potentially-conflicted advice.
“If you are the owner of a financial advice practice and are considering obtaining your own licence, trying to minimise potential conflicts, then this all must sound mighty complicated and bureaucratic,” he said.
“It may even prevent you from crossing the Rubicon and obtaining your own AFSL. Building barriers to independence is surely not the outcome ASIC is seeking.”
Mr Hoyle added that ASIC’s aim to ensure consumers are not misled is “noble”. However, it is also a “pipedream”, he said.
“No business operates without any conflicts of interests,” Mr Hoyle said.
“Removing conflicts is impossible. Minimising them and fostering trust should be our industry’s main aim.”
Mr Hoyle will be expanding on his comments in an upcoming edition of ifa Opinion.
Agree with Fergus….just be “Non Bank Owned”….that is all we say and it is enough. Being 100% Independent is almost impossible….
As for a term stopping those jumping ship…I doubt it….the real hurdle is the cost of aquiring and then running your own license…..this is what we should be working with ASIC on… a fair model with fair pricing so Own License is a viable option for the majority and not the minority.
Standard assumptions around being compliant under either model….just in case anyone asks ?
It’s great to see this issue getting plenty of oxygen. I welcome the debate.
There’s been a number of comments on other articles saying that the definition of independence in s.293A is outdated. Curious to know which of the three rules advisers believe most needs to be updated.
IFA, can you possibly run a poll on this?
Is it:
a) advisers should be able to receive commissions on insurance and still be able to call themselves independent;
b) advisers should be able to charge % based fees and still be able to call themselves independent; or
c) advisers should be able to be licensed by an AFSL which has it’s own products (i.e one of the four banks) and as long as the AFSL doesn’t hold equity in the authorised rep firm, the advisers should be able to call themselves independent.
Which one is the one advisers think most needs updating?
Minister for the Banks and FSC, Kelly Odwyer will work in every way possible for the institutions to fight against the IFA’s. This has only been brought up by ASIC since she has been involved.
Odwyer is a disgrace to the IFA sector.
Thinks she’s still working for NAB….
How do you know she is not? I would like to see all politicians like all advisers required to complete a soft dollar benefit register. i also want to see their full names and personal home address as i am required to be published for all to see, in the name of transparency of course. let’s see if they do that!
When is ASIC going to go back to doing what it is supposed to be. It is supposed to be a regulator to enforce legislation as laid down by parliament. It is not supposed to be trying to dictate how legislation is to be interpreted nor trying to have legislation amended to suit its own purposes. Any wonder they do not have the resources to do their job when they are spending time in areas outside their area.
The trouble with all of this is that was a deliberate piece of drafting many years ago to prevent the start up of non institutionally owned AFSL’s and ASIC is stuck with it.
If the definition is too constrictive just ask the Government to change it as its not a big job.
correct. people fail to see through the intended effect of the legislation enacted. the legislation constructed by effective lobbying by the large institutions supported and enforced by government to the detriment of sme’s and most importantly the consumer
Easy, call your business non-institutionally owned, maybe add non bank owned and consumers will understand that your business is not owned by a bank. You don’t need to even mention “INDEPENDENT”.
RE: “It may even prevent you from crossing the Rubicon and obtaining your own AFSL. Building barriers to independence is surely not the outcome ASIC is seeking.” There are no barriers to being INDEPENDENT, especially for a firm with its own AFSL, simply meet the Corps Act of Independence.