PIFA helps advisers avoid conflict of interests
The Profession of Independent Financial Advisers (PIFA) has created a decision tree to help advisers understand the complexities of variable income.
In its guidance paper on the Code of Ethics, the Financial Adviser Standards and Ethics Authority (FASEA) previously warned about how variable income, which includes asset fees, commissions and brokerage fees, can induce advisers ‘to cross that invisible line’.
PIFA’s flowchart would help advisers to understand the in’s and out’s of variable income and prevent any conflict of interest occurring.
“Any business analyst worth her salt will tell you that if there is a risk threatening your practice, before you consider ways to mitigate it you should first ask yourself whether it can be removed altogether – problem solved with zero risk. Many advisers lose a lot of revenue when they change their remuneration structure because there is something missing from their plan.
“What’s missing is ‘The Variable Income Decision Tree’. This flowchart provides practitioners with a roadmap to approach clients and make the transition from variable income to conflict-free remuneration. The benefit is that not only do you get to keep as much revenue on the table, you can actually build on it to make the exercise profitable,” the organisation said.
The flowchart is available for advisers to download.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.