If you’re in the market for financial advice, choosing whom you get that advice from is one of the most important steps.
You might have heard the term ‘Independent Financial Advisor’ and thought, how does that differ from a regular Financial Advisor? Well for starters, the Australian Securities and Investments Commission (ASIC) has very strict criteria on who can claim to be an Independent Financial Advisor.
Independent financial advice should be free from bias, conflict and influence of all products.
Here are some things to look for to ensure you are getting truly independent advice from your provider:
- They are not employed by a bank. As banks own their products, there will be incentive for your financial advisor to recommend these to their clients.
- The Financial Firm they are working for is not owned by a bank. You would be shocked to see how many Financial Planning Firms are giving advice under a Banks Licence.
- They receive no commission or kick backs from product manufacturers.
- No Asset-based fees. Asset fees are calculated in the same way as commission and prevent your advisor from being impartial.
The Royal Commission into the financial services industry recently exposed the unethical behaviours that are still conducted by some in the business. One of the recommendations made by the Royal Commission, was that financial planners that are in any way conflicted by remuneration should be required to disclose their lack of independence to clients.
Sadly, many people lump all financial planners into the same basket, assuming that everyone is working with eyes on their own pockets. However, there are independent advisors out there whose primary motivation is what is in the best interest of their client.
Plutus Financial Guidance are proudly certified PIFA (formerly IFAAA) Gold Standard Independent Advisors. This means we take no asset-based fees, commissions, kickbacks, nor do we receive any referral fees.
With no affiliation to outside parties, or products of our own, you can be assured that any recommendations we make will be tailored to your specific needs.
You can also read more about our range of advisory services here.