You can be forgiven if you assume that in 2019 all financial advisers are required by law to provide advice that is completely independent and solely in a client’s best interests, but sadly that is not the case.
Financial advisers can still provide advice that can present conflicts of interest. This may be because they receive commissions or fees based on some of the products they sell you, or because they only sell financial products from a limited selection of manufacturers.
Financial advisers that fall in this category are not able to call themselves independent, but they are also not currently required to tell you that they are not independent (although the Royal Commission recommended that they should).
Members of the Profession of Independent Financial Advisers (PIFA) are the gold standard of independence in financial advice, with all members meeting the following criteria:
- No asset-based fees
- No commissions or incentive payments from product manufacturers
- No ownership links or affiliations with product manufacturers
In November 2019, SuperGuide attended the PIFA’s annual symposium in Canberra and interviewed a selection of PIFA members about why it was critical for them to only provide independent financial advice. In the video below they also share how it feels now they are independent, and how it’s changed how they work with clients.
You can learn more about the importance of independent financial advice in the SuperGuide article Independent financial advice: Why it’s important and how to find it. In the SuperGuide article What makes a financial adviser independent? the President of PIFA Daniel Brammall describes how to identify an independent financial adviser.
All PIFA members are listed here.
Learn more about financial advice in the following SuperGuide articles:
- 5-step guide to the different types of financial advice on offer
- SMSFs: What advice can your accountant provide?
- Independent financial advice: Why it’s important and how to find it
- Find an Australian independent financial adviser
- Financial coaching: What is it and why may you need it?
- What makes a financial adviser independent?
- 8 warning signs that you’re with a bad financial adviser
- Financial advice: What are the risks and benefits?
- Super advice: How to find a suitable financial adviser
- How to find low cost (or free) financial advice
- Retirement planning: How much does financial advice cost?