Speaking to InvestorDaily, Guardian executive manager Simon Harris said that leading up to the implementation of the Future of Financial Advice (FOFA) reforms there has been “a lot of movement” in the industry with “a lot of unsettled advisers”.
Mr Harris told a media briefing earlier this year Guardian is currently in talks with former advisers from failed licensee AAA Financial Intelligence, and may eventually look to recruit up to 40 per cent of its 150-plus authorised representatives.
Mr Harris said his firm has invested “a lot of time and money” building processes to review the advice delivered by its authorised representatives.
“Supervision and monitoring really is an important aspect of bringing on new advisers – regardless of whether or not they’ve moved from a failed Australian Financial Services Licence [AFSL],” said Mr Harris.
The Australian Securities and Investments Commission (ASIC) has made it “absolutely clear that they’re looking at quality of advice issues”, he added.
“ASIC are really clear in the market at the moment about their intention to ensure appropriate resources are in place to manage and supervise advisers,” said Mr Harris.
ASIC deputy chair Peter Kell recently stressed that licensees need to take extra care when recruiting advisers from organisations with a history of “poor compliance”.
Dealer groups with institutional backing like Guardian are better placed to deliver the training and education that will be required under the FOFA regime, he said.
“Some of those dealerships that don’t have the infrastructure to support significant change projects like this have either fallen by the wayside or they’ve seen a decline in adviser numbers,” said Mr Harris.
Suncorp has not been offering sign-on incentives to potential advisers, said Mr Harris – a practice which has been alleged of some of the other institutional players.
“There’s been a significant distortion in the marketplace as a result of some of these alleged sign-on bonuses, and I don’t think it’s been part helpful for a sustainable industry,” he said.
Guardian is focused on working with its practices to help them through the change process and ensuring they are as efficient and profitable as possible in the long term, Mr Harris said.
The dealer group is looking at leveraging technology with its advice practices, and is encouraging its advisers to outsource services where possible, he said.
“We’re taking a longer term view of the value of their business and looking at different pricing and remuneration models with their clients,” said Mr Harris.
“[That might cause] some short-term pain, but it will be a long-term benefit to the value of their business,” he said.
