AIOFP board exodus follows white label platform deal

Four directors of the Association of Independently Owned Financial Professionals have departed the board, citing concerns over the launch of a white label platform and future direction of the association.

Last month, the AIOFP announced a partnership with DASH for a white label platform which will be majority-owned by the association via new entity, Foundation Platform Services.

Platform industry veteran Arthur Naoumidis, who was appointed CEO of the new provider, said last month that any profits generated from the platform operation will be directed toward enhancing member services for the association, which represents licensees that are privately owned and not associated with financial institutions.

Professional Planner can reveal that Mark Harris, Mark Livingston, Halle Yilmaz and Sam El Shammaa have resigned their roles as directors of the association.

Asked to comment on the departures, AIOFP executive director Peter Johnston told Professional Planner: “We don’t see it as a shake-out, we see it as a clean-out. Most of them had their tenure up this year anyway, and we’re not sorry to see them go. Halle had legitimate concerns over the platform which she disagreed with which is fair enough.”

According to multiple association members, speaking to Professional Planner on condition of anonymity, concerns had been raised by these members and others that the platform launch was a commercially motivated move to generate revenue.

The sources suggestedthat attempts by some board members to delay the platform’s launch until proper due diligence had been completed were unsuccessful. Member concerns over the establishment of the platform service allegedly erupted during the association’s offshore conference in Bali, Indonesia, last month.

The Foundation Platform Services is the association’s second foray into running a platform, having launched Personal Choice Management, a white-labelled version of BT’s Asgard platform, in 2010. In an online blog post, Johnston said this was shut down after the Hayne royal commission banned grandfathered commission revenue.

The new initiative was launched in response to a blacklist by major platform providers against InterPrac Financial Planning advisers due to the fallout of the $1 billion Shield and First Guardian collapse. InterPrac is a longstanding member of the AIOFP and its owner, Sequoia managing director Garry Crole, was previously a board director of the association, stepping down last year.

In the wake of the collapse of Shield and First Guardian, major platforms (with the exception of MLC) placed conditional bans on InterPrac advisers. Most bans involved halting any new business onto the platforms.

Macquarie and Netwealth, which hosted Shield and First Guardian on their platforms respectively, were the first to do so, and have received court orders to lift governance standards. Both Macquarie and Netwealth have settled with ASIC to remediate investors.

The other major platforms – BT, Colonial First State and HUB24 – had not been implicated in the Shield and First Guardian collapse, but still commenced their own blacklists of InterPrac advisers.

InterPrac is being sued by ASIC for alleged due diligence failures of its advisers. Two financial advisers ASIC has considered central to the distribution of the Shield and First Guardian funds were authorised representatives of the licensee.

But the AIOFP seemingly stood by InterPrac and Sequoia. In a public blog post last year, Johnston referred to Crole as “a potential saviour of the profession” for publicly advocating for platform trustees to remediate investors.

In early 2024, Crole paid for six-month AIOFP memberships for InterPrac advisers.

The association has long been divisive in the industry, seen by some as opponents of the project to professionalise advice and others as effective advocates for small business and against industry regulation.

Johnston and the association had a major win when then-shadow Minister for Financial Services Stephen Jones announced at an AIOFP conference that Labor would legislate a controversial experience pathway for financial advisers with 10-years of experience if elected at the May 2022 election – a promise the Albanese government subsequently made good on in 2023.

But the association has had a more tumultuous relationship with the regulator after Johnston alleged an ASIC official had made a widespread slur against financial advisers in a closed-door Treasury meeting.

Johnston wrote to ASIC chair Joe Longo, with Minister for Financial Services Stephen Jones copied, demanding a written apology from the regulator over the comments.

ASIC chief executive Greg Yanco did not accept the characterisation of Eccleston’s statements and said the regulator would only deal with the association in writing going forward.