No allegiance to any Bank or Insurance company
Investment Zone doesn't work for any bank, fund manager, product provider or insurer
Investment Zone doesn't work for any bank, fund manager or insurer so our advice is always in your best interests, not someone else's.
If you’re shopping around for financial advice, make sure you ask the adviser if they are aligned to a bank, fund manager or insurer. Then ask yourself, who are they really working for…you or them?
What is the difference between a non-aligned and an aligned financial planner?
Non-aligned – A ‘non-aligned’ financial planner works more independently than an ‘aligned’ planner and will generally manage their own business or independent organisation. Their business is not owned by a bank, fund manager, product provider or similar. Planners have the freedom to choose which products and services to offer clients based on substantial research into financial trends and forecasts – all considered in relation to their client's specific situation, value for money and investment style and to get the best outcome. They are generally smaller professional organisations building long term often intergenerational relationships with their clients.
Non-aligned financial advisers represent a small percentage, approximately 10-15% of the industry in Australia, however, non-aligned advisers are becoming a more popular alternative to big institutions. This change comes from clients who, more and more are valuing the personalised, long term and stable advice relationship that non-aligned advisers can offer.
Aligned - An aligned financial planner is generally employed by, or has responsibilities towards one of the large and powerful industry participant such as a bank, industry fund, insurance company, or fund manager. They generally have access to a product range tied to their employer’s organisation and are required or encouraged and may be remunerated to promote these products to their clients and may be remunerated. The result could be that the aligned financial planner offers advice, products or services that are not specifically selected to suit the client’s particular situation, but rather to meet the expectations of their employer.
As Brad says, “It’s all about the strategy, not products”
What should I consider when choosing between an aligned and non-aligned adviser?
It comes down to personal choice. Ultimately, you should be satisfied that the adviser, whether they are aligned or not, has the required experience and knowledge to understand your specific circumstances and needs. You should ask what areas they are specialised in, their training and their experience. You should ask if the adviser is limited in what they can assist you with, both from a strategy and product viewpoint.
Many feel they are better off dealing with a non-aligned adviser because they’ll receive uncompromised advice that won’t automatically lead to a product based solution.
Is it better to choose an aligned or a non-aligned adviser?
Everyone’s financial situation is different. There is simply no right answer here. However, there may be times when direction guidance and support are the only services required by your adviser – no product needed. This situation does not suit the business models of many of the large aligned financial providers.
How do non-aligned advisers decide what products or services to recommend to their clients?
Non-aligned advisers can be more open regarding the strategies, services products or solutions they recommend because they are not expected to promote a specific product or service. It’s all about the strategy, not the product for profit.
What type of adviser is likely to give me the best financial outcome?
There is no correct answer to this question. What should drive your decision, is trust, peace of mind, ongoing flexibility, a genuine understanding of your circumstances, clear goal setting, your tolerance to risk and passing ‘the sleep test’. The best advice is always that which is tailored to your specific circumstances.
What is FoFA and how does it affect financial advisers?
The FoFA reform (Future of Financial Advice) was made mandatory on 1 July 2013 and aims to make the financial planning industry more transparent and accountable and to improve the quality or financial advice offered in Australia.
FoFA has led to the introduction of the new fee disclosure and opt-in requirements, enhanced ASIC’s enforcement powers, made it obligatory for financial advisers to act in their clients’ best interests and imposed a ban on conflicted remuneration.
The changes were placed on the industry largely as a reaction to the poor advice and practices employed by certain divisions of some of the big institutions. This problem seems to be ongoing with a number of the larger industry participants (particularly the banks) facing enforceable undertakings in relation to the quality of advice provided to clients by their planners. Of course, for any financial planning business that operates with integrity first and foremost, a ‘client’s best interest’ is a given and it’s business as usual.
Remember, Investment Zone is 'not aligned' with any bank, fund manager or insurer so our advice is always in your best interests, not someone else's. It’s an investment in your future.