What is an independent financial planner?
Wealth On Track has its own licence, and so is not aligned with any bank or product manufacturer. Also we are a fee of service business. Many clients come to us for that reason.
In Australia the legislation has put quite strict definitions around who can use the term ‘independent’. This is covered in s923A of The Corporations Act. This has a general prohibition for financial services licencees on using the word ‘independent’, ‘impartial’ or ‘unbiased’. However they can use those terms if they meet some conditions, which are:
- They don’t receive any commissions
- They don’t get any payments from product issuers based on volume, and
- They don’t get gifts or benefits from product issuers that might be thought to influence them, and
- They have no restrictions on the products they can provide, and
- They have no conflicts of interest.
We have never had commissions on investment products. But sometimes clients prefer to have a commission for their life insurance/income protection arrangements. This can be preferable for the client where they would rather do this than pay a much higher upfront or ongoing fee.
A commission is a payment paid from the product issuer to the adviser upon completion of an insurance case. It is not paid by the client. This can obviate the need for the client to pay a high upfront advice fee, when they may not have that money – often they are also paying off a home loan as well.
Alternative Payment Structure
Our clients can request an alternative payment structure should they wish – in other words, paying more fees in return for the commission being rebated from their insurance premiums.
Also we do get 25% of the net commission of loans that are written by an external mortgage broker we refer clients to, Michael. We refer clients to him because he is very good at what he does and so we can be confident the client is in safe hands. Also we can make sure that the client’s debt structuring is properly coordinated with our broader advice.
So we describe Wealth On Track as a non-aligned financial planning business. And we always put clients first. Wealth On Track has no conflicts of interest. We are a Professional Practice with the Financial Planning Association of Australia.
Independent Financial Planners