The Independent Financial Advisers Association of Australia guides Australians on how to find financial advisers who practice without incentive and without conflicts. It also educates and promotes the Gold Standard of Independence™ for financial advisers in Australia.
In 2009, our industry’s regulator, the ASIC, made a submission to government that was designed to restore investor confidence in the financial markets and protect retail investors. The ASIC went on record saying that the typical financial planner acts as a “sales force for financial product manufacturers” and that advisers are “a product pipeline”.
Eighty-five per cent of financial planners are associated with a product manufacturer, who are paid by commission or asset fees (commissions by another name). The ASIC says these commissions and product affiliations are conflicts of interest which “distort the quality of advice” and should be banned.
The leading consumer advocacy group in Australia, CHOICE, is lobbying for the same thing.
A NEW ERA
In that same year, the IFAAA was established. Our aim was to join forces with the likes of the ASIC and CHOICE with the purpose of promoting “genuinely independent” financial advisers to stand out from the rest of the financial planning community. These advisers now practice the IFAAA’s Gold Standard of Independence™.
Over the recent years, the work of the IFAAA has attracted much attention, from consumer enquires all over Australia in search of IFAAA members practising the Gold Standard, to financial planners wanting to know “how” they can practice the Gold Standard, requests for ‘authority’ comments from the media (ABC’s The Business, BRW, AFR, The Australian, to name a few) and invitations from government bodies to sit on expert panels, such as Future Of Financial Advice (FOFA) and just recently, the Australian Financial Services Licence Industry Working Group to introduce and establish a national financial adviser register.. The success of the IFAAA’s message has meant that our core purpose has expanded to:
- Simplify the definition of independence for advisers,
- Promote the value of independent advice to consumers,
- Train and develop independent financial advisers, and to
- Safeguarding the interests of the public.