Own licence not always more expensive
Although financial planners are often told it is cheaper to be the authorised representative of a major licensee, that is not necessarily the case, according to Pathway Licensee Services general manager Kate Humphries.
She said that although large dealers often told authorised representatives that being self-licensed was more expensive - and there were, in fact, additional costs involved with maintaining one's own licence - these could be evened out by not having to pass revenue on to a licensee.
Pathway Licensee Services recently rebranded from Paragem dealer services under new owners netwealth, and incoming general manager Humphries said the three main focuses of the business are: compliance and risk management, customisation and support of XPLAN via a 'model office', and professional development and leadership.
Humphries said she wanted the business to be at the forefront of helping the industry develop into a profession, and supported the Financial Planning Association's code of professional practice.
"We're also interested in stimulating conversation around industry structure, and whether some of the relationships that planners have with dealers are in the best interests of clients," she said.
At the official relaunch of Pathway in Sydney last month, outgoing Senator Nick Sherry - who had responsibility for the financial services portfolio in the early stages of the current round of industry reforms - said the real solution to many of the problems around the perception of advice and conflicted remuneration was the complete separation of product from advice. However, it was now too late to go down that path, he added.
Humphries also said that product and advice aren't necessarily aligned, and should be two separate things.
"Product is merely the vehicle that is used after the advice - it shouldn't be the other way around," she said.
The industry needed to consider where the client sat in terms of the structure in the relationship between the dealer and authorised representatives. Product providers seem to direct too much marketing towards financial advisers rather than to the end consumer, she added.
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