More advisers realising the true value of independence

Associated Advisory Practices (AAP) has seen an escalation in enquiry from financial planners looking to move away from of institutionally-aligned advice firms and acquire their own Australian financial services licence (AFSL), according to its CEO, Soula Cargakis.

“In August alone, five new boutique licensees joined and there are many more with whom we are in discussions,” Soula said.  “With so many negatives at the moment around institutionally aligned advice, advisers are questioning the best financial planning business model going forward.

“One of the concerns I am hearing from advisers is the perception from their clients that independence of advice is compromised when provided by vertically integrated groups, many believing that the ownership status of a licensee has a bearing on the quality of advice given.

“There is increased interest in independence as advisers realise they don’t need the support of a big institution to cope with the increased regulation and compliance around the FOFA reforms.  They realise the true value of independence in terms of client perceptions, and their own control and flexibility in running their practice and business strategy.

“Advice tools and back office systems, paraplanning, compliance and governance, acquisition funding, succession planning solutions are all available outside of institutions given the significant investment made by independent groups such as AAP over the past couple of years.”

Soula said that AAP now offers support services to about 900 authorised representatives under more than 200 licences.  “While each run very individual practices under their own banners, what they all have in common is that they want to be the decision-maker in their business, not to be told what to do and which products to recommend by an institution.  They want to retain their own independence and provide quality independent advice to their clients.  They want their own branding and to be free to make their own choices but, at the same time, they want to network with like-minded professionals with whom they can share ideas.

“As a boutique licensee it can be lonely out there so this gives them a home and an opportunity to network with like-minded people,” Soula said.

Independent licensed financial advice businesses looking to partner with AAP are offered access to a full suite of services, including practice management, practice systems, professional standards and compliance, education, business planning, marketing and technical support. They also have access to an exclusive professional indemnity offer, and represent their interests to government and the industry.

In addition, licensees operating under AAP were offered succession planning, acquisition funding and client book purchasing support as part of a suite of new practice offerings announced by parent group Centrepoint Alliance last month.

Barry Crabtree, Director of Financial Advisory Services in Adelaide said he joined AAP a decade ago and has found the relationship very beneficial.

“What really attracted us, being an independent licensee, was having access to resources and services that a larger group can provide.  We make all our own business decisions and operate independently but, at the same time, enjoy the all the benefits of being part of a very supportive network.”

AAP, a subsidiary of Centrepoint Alliance, provides services and support for boutique licensees to strengthen their business and professionalism in a cooperative environment. Since its inception in 2006, Associated Advisory Practices Ltd has grown to include over 200 independently owned boutique licensees.