Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 263

Why more financial advisers are moving to 'independence'

The flight to 'independence' from major institutions by financial advisers has been a developing theme over recent years and it is set to continue. The findings of the Financial Services Royal Commission increase the importance of demonstrating greater independence between products and advice, but the reasons for the move are as varied as the types of clients and communities advisers serve.

Not just a product off a shelf

What are independent advisers looking for when partnering with technology and service providers? When I asked this question of our clients, the advisers, a strong theme in the responses was that they want to build trusted relationships and partnerships as opposed to buying a product off a shelf or a ‘user licence’. They want open architecture and an Approved Product List (APL) that does not restrict them from delivering what is in the best interest of their clients. They want compliance with a delivery mechanism that is flexible, allowing their own culture and brand in communications. Ultimately, they also need easy to use services and platforms that allow them to spend more time with clients without being bogged down in administration and compliance tasks.

Jayne Graving of Arch Financial Planning summarised the drive for independence as:

“I would say the benefits of being independent and what we value are the ability to partner with best of breed and like-minded firms with resources including research, technology providers, platforms etc. We have complete flexibility and are not locked into any system, methodology or product. Every layer of the advice process is independent of the others, and everyone retains the integrity of their service delivery. There are no impeding constraints like limited APL’s or conflicts, just teams of professionals working together by choice to achieve the best outcomes.”

What about the client perspective?

Some of the themes in the adviser feedback on what their clients are looking for, and hence what the adviser needs to deliver, include:

  • Transparency and confidence in the safety of the assets
  • Access to appropriate investment options at reasonable cost
  • Cost effective and demonstrative value of advice
  • Honesty and integrity in the way that services are priced, and fees are levied, with no hidden charges (such as in the form of no interest on cash)
  • Online portal for viewing portfolios and ease in communication paths for updates from the adviser.

Not only are these advisers looking for great services and products for themselves, the outcomes and the experience for their clients was paramount.

Features of the platform that assist the advice process

Advisers say they are looking for a provider to deliver these outcomes for their clients:

  • Remove the layers of fees built up over the years of institutional management
  • A cost-effective solution to assist with best interest duties
  • Support and automation of compliance through audit trails, controls, alerts and monitoring, as well as accuracy through reconciliations
  • Flexible and reliable reporting systems that can integrate into financial planning software
  • Open architecture giving the ability to choose from a landscape of financial products and services based on what is best suited to achieving the clients’ goals: “We don’t want to be beholden to one major, vertically-integrated financial company.”
  • Next-generation thinking: “Gone is the old ‘hidden fee’, ‘shelf space’ and ‘lock in’ approach.”
  • Branding by the adviser to keep the marketing and messaging consistent and assist in a retention of culture
  • Technologically advanced so that it reduces administrative staff time, lowering cost, reducing human error and increasing the efficiency of managing models. “Time spent on back office and administration is time that could be better spent working with our clients.”
  • Scalability to grow the business
  • A single solution that can be tailored for different types of clients, including retail, wholesale, families, individuals and not-for-profits

The efficiency of model portfolios and managed accounts

Operational efficiency and best interest responsibilities are also assisted by the use of model portfolios and managed accounts.

Firstly, advisers can easily change a model portfolio and it flows through to all clients’ portfolios with that model, and a bulk rebalance can occur smoothly and quickly.

Secondly, a good investment committee or investment manager can make a decision and make the change within a day, allowing them to be responsive to market conditions in best interest of clients’ returns and outcomes. Intraday ‘trading’ is no longer dependent on a stockbroker’s ability but execution is transferred into advice through segregated accounts with their own Holder Identification Numbers (HIN).

Liza Janakievski, CEO of Giles Wade, expresses what many advisers view as the emerging approach to the relationship between the technology (platform provider) and the adviser:

“As a firm with bespoke family group clients, we want to ensure that our future requirements for client tailoring are heard and not just put on a ‘wish list’.”

Even though technology plays a bigger role in the life of advisers and their clients, it does so in subtle ways. Interactions with technology are becoming more seamless within the advice process and systems are becoming easier to use. The goal at WealthO2 is to deliver elegant and intuitive software solutions for advisers that are efficient and compliant. Advisers want to spend more time with clients and develop relationships and let the software implement the adviser’s best interest advice in a scalable and efficient manner.

Now is the opportunity for advisers to cleanse the public perception of poor behaviour raised in the Royal Commission and deliver better outcomes that are clear of conflict and give the best results for both the client and the business alike.


Shannon Bernasconi is Managing Director of WealthO2, a wealth management software solution provider for financial advisers. This article does not consider the financial circumstances of any individual.


Leave a Comment:



Eight steps to expect when seeking financial advice

Four reasons to engage a financial adviser

FoFA, the Failure of Financial Advice, Take 2


Most viewed in recent weeks

Stop treating the family home as a retirement sacred cow

The way home ownership relates to retirement income is rated a 'D', as in Distortion, Decumulation and Denial. For many, their home is their largest asset but it's least likely to be used for retirement income.

Two strong themes and companies that will benefit

There are reasons to believe inflation will stay under control, and although we may see a slowing in the global economy, two companies should benefit from the themes of 'Stable Compounders' and 'Structural Winners'.

Welcome to Firstlinks Edition 433 with weekend update

There’s this story about a group of US Air Force generals in World War II who try to figure out ways to protect fighter bombers (and their crew) by examining the location of bullet holes on returning planes. Mapping the location of these holes, the generals quickly come to the conclusion that the areas with the most holes should be prioritised for additional armour.

  • 11 November 2021

Reducing the $5,300 upfront cost of financial advice

Many financial advisers have left the industry because it costs more to produce advice than is charged as an up-front fee. Advisers are valued by those who use them while the unadvised don’t see the need to pay.

Welcome to Firstlinks Edition 431 with weekend update

House prices have risen at the fastest pace for 33 years, but what actually happened in 1988, and why is 2021 different? Here's a clue: the stockmarket crashed 50% between September and November 1987. Looking ahead, where did house prices head in the following years, 1989 to 1991?

  • 28 October 2021

Why has Australia slipped down the global super ranks?

Australia appears to be slipping from the pantheon of global superstar pension systems, with a recent report placing us sixth. A review of an earlier report, which had Australia in bronze position, points to some reasons why, and what might need to happen to regain our former glory.

Latest Updates

Investment strategies

Are they the four most-costly words in investing?

A surprisingly high percentage of respondents believe 'This Time is Different'. They may be in for a tough time if history repeats as we have seen plenty of asset bubbles before. Do we have new rules for investing?

Investment strategies

Firstlinks survey: the first 100 tips for young investors

From the hundreds of survey responses, we have compiled a sample of 100 and will publish more next week. There are consistent themes in here from decades of mistakes and successes.


What should the next generation's Australia look like?

An unwanted fiscal drain will fall on generations of Australians who have seen their incomes and wealth stagnate, having missed the property boom and entered the workforce during a period of flatlining real wages.


Bank results scorecard: who deserves the gold stars?

The forecasts were wrong. In COVID, banks were expected to face falling house prices, high unemployment and a lending downturn. In the recovery, which banks are awarded gold stars based on the better performance?

Exchange traded products

In the beginning, there were LICs. Where are they now?

While the competing structure, ETFs, has increased in size far quicker in recent years, LICs remain an important part of the listed trust sector. There are differences between Traditional and Trading LICs.


Should you bank on the Westpac buy-back?

Westpac has sent out details of its buy-back and readers have asked for an explanation. It is not beneficial for all investors and whether this one works for some depends on where the bank sets the final price.

Investment strategies

Understanding the benefits of rebalancing

Whether they know it or not, most investors use of version of a Strategic Asset Allocation (SAA) to create an efficient portfolio mix of different asset classes, but the benefits of rebalancing are often overlooked.


Six stocks positioned well for a solid but volatile recovery

The rotation to economic recovery favouring value stocks continues but risks loom on the horizon. What lessons can be drawn from reporting season and what are the trends as inflation appears in parts of business?



© 2021 Morningstar, Inc. All rights reserved.

The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.