Advice body moves to counter SMSF trend
An association of non-institutional financial planning licensees has laid out a plan for “pure” firms that choose not to provide SMSF advice and administration.
Speaking to SMSF Adviser’s sister publication ifa, Peter Johnston, executive director of the Association of Independently Owned Financial Professionals (AIOFP), said his lobby group is concerned with providing members with long-term strategic business plans that do not include incorporating SMSF advice.
“For those [financial advice] practices who do not want to offer SMSFs or surrender to the institutions’ vertically integrated models, financial survival will not be easy,” Mr Johnston said, adding that these practitioners are seeking to stay true to a “pure” model untainted by cross-subsidisation.
The AIOFP has long argued that the incorporation of SMSF administration services into a financial planning practice is a conflict of interest akin to in-house product bias in vertically integrated institutions or commissions from investment platforms.
“It is no mere coincidence that all of the industry award winners for advice excellence in recent times have gone to advisers who offer SMSF administration services to their clients,” Mr Johnston lamented.
“This group have cleverly taken the administration function and margin away from the institutions to support their practice infrastructure therefore cross subsidising the advice function.”
Mr Johnston said that while his organisation is not opposed in any way to SMSF structures, its consultative committee is now seeking guidance from government about how “pure” financial planning practices can survive in the post-FOFA environment.