Salaried advisers and the lack of client ownership
The salaried financial advisers who have signalled their desire to move to self-employed status are doing so because they want genuine ownership of the customer relationship.
That is the bottom line of a Money Management survey which has revealed that, given their preference, a significant majority of respondents who are salaried financial planners would prefer to be self-employed and working in a self-licensed capacity or as an authorised representative (AR).
At the same time, industry executives said there was absolutely no doubt that salaried advisers did not technically, legally own the relationship with their clients irrespective of how long they had been servicing them.
What is more, salaried advisers were usually subject to restraint clauses within their employment contracts which precluded them taking clients with them when they changed employers.
The majority of salaried advisers had been employed by superannuation funds and the major banks, but that had begun to change as a result of the banks exiting wealth management
Association of Financial Advisers (AFA) general manager, policy and professionalism, Phil Anderson pointed to the decline in the numbers of salaried financial advisers which had accompanied the exit of the banks.
He said that, traditionally, employment as a salaried adviser had often represented a pathway to self-employed status and he believed this would continue to be the case in many instances.
However, Anderson said that there would always be a cohort of advisers who were content to work in a salaried environment where, notwithstanding not ‘owning’ their clients, they were not subject to many of the issues which confronted self-employed advisers.
While the exit of the major banks has reduced the numbers of salaried advisers, major players such as IOOF have been signalling their intention to grow salaried adviser numbers with its latest results announcement confirming that the Bridges network would be transitioned to a fully salaried network.
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