We provide truly independent advice and are one of only a small number of advisors in the industry that are permitted to use the terms “independent”, “impartial” and “unbiased” in relation to the advice we provide. We can do this because we satisfy the very strict requirements of s923Aof the Corporations Act. In contrast, most advisors are prevented from using the terms, because they fail at least one of the following tests:
No ownership links or affiliations with a product manufacturer
The major banks, insurance companies and fund managers dominate financial planning. It is estimated that over 80% of financial planners are owned or affiliated with product providers. Many privately owned planning companies are still associated with product providers due to their licensing arrangements. Many investors are unaware of these relationships, even though they may be disclosed in the fine print.
The concern is that such links may create potential conflicts of interest. For example, there may be encouragement to use “in house” products or there may be restrictions on the type of investments that can be used.
Super Focus is privately owned and we have no ownership links or affiliations with any bank, insurance company or product provider.
Notwithstanding that commission on investment products is no longer permitted from 1 July 2013, many advisers continue to receive commission under the “grandfathering” provisions. Furthermore, commission on insurance products continues to be permitted, which means that many financial advisors are unable to pass this test.
Super Focus does not accept commissions from any financial product provider.
No Volume Payments
It is common practice in the financial planning industry for financial advisors to receive payments in relation to products (such as Wrap accounts),which are based on the volume of business done with that provider. Although such payments are being phased out, in many cases, advisors continue to receive them under the “grandfathering” provisions.
Super Focus does not receive any remuneration based on the volume of business placed with any issuer of a financial product.
Gold Standard of Independence
Although not a legislative requirement,we believe there is one more test that advisors should meet, if they claim to be truly independent. This test requires advisors not to charge asset based fees (fees calculated as a percentage of funds invested).
We believe asset based fees lead to potential conflicts of interest. For example, an adviser’s fees will be higher if they recommend that surplus funds are used for investment purposes, rather than reducing debt. Similarly, there may be different fee implications depending on the type of investment recommended. For example, direct property versus shares or managed funds.
At Super Focus, we believe in flat fees that are basedsolely on your situation andnot calculated purely on the size of your investments. Our approach to pricing and our successful passing of the three tests described above, means that we can claim to be truly independent. It also means that you can rest assured that we have no conflict of interest whatsoever, when we provide you with advice.