A newly formed association of the growing legion of independent financial advisers is hoping to tackle what it sees as unfair practices and imbalances in the marketplace.
The recently launched Independent Financial Advisors Association (IFAA) plans to spearhead a campaign for an equitable financial services industry through advocacy of regulatory convergence in the insurance, banking and broking industries to create a level playing field for all members. The association also plans to act as an industry lobby group and seeks to open direct dialogue with the Securities and Futures Commission (SFC).
IFAA chairman Sidney Sze, chief executive of Midland Wealth Management, said for financial planning to move forward a clearer set of regulatory guidelines and greater transparency across the industry were needed. This would benefit both the public and IFA professionals. 'Transparency and openness leading to better public education can only create an environment where wiser investment choices are made,' Mr Sze said. The IFAA would like to represent the industry by working with the SFC to establish across-the-board best practices.
In a survey carried out by the IFAA, members' said they are concerned they are being squeezed by unqualified bank staff that can penetrate the fast-growing financial planning market more effectively due to wider distribution channels.
They are also concerned the present SFC regulatory guidelines for independent financial advisers are ambiguous and subject to uncertain interpretation. 'It is difficult for an IFA to judge whether certain internal measures are good enough. It would be helpful to have an industry standard that the entire sector can work from,' said Mr Sze.
Members also claim they are competing with unfair practices such as rebates from non-IFA organisations that also offer promotional gifts to clients who invest with them. They say some unit-linked life insurance investment tools have poor disclosures and are being sold to the general public with onerous commission charges and questionable annual fees.