The CEO of the AIOFP, Peter Johnston, reports on the Canberra conference.

Hi, one of the key discussions at the Canberra Conference was around those members who want to qualify for the Certified Financial Strategist [CFS] designation and those who want to go a step further and receive new client referrals from AIOFP Corporate/Superannuation/Boutique Banking/Corporate network of clients.

The AIOFP Board is pleased to cater for both member aspirations but of course there must be conditions in place to ensure the CFS designation is protected from poor behaviour. As we all know it’s the minority of ‘bad apples’ that can and do have the potential to taint everyone. The latest is the Dixon fiasco where over $300 million of consumers monies has been lost when an Advisory group morphed into a vertically integrated USA based manufacturer with disastrous results for clients and the Advice community’s reputation.

We cannot afford to have one ‘bad apple’ with this project. During my time as an Adviser in the 1980/90’s [and caught in 3 product failures] the first comment my affected clients would make is ‘is my capital is safe?’ Back then clients cared more about the return OF their capital than the return ON their capital – I don’t think this attitude has changed much. You won’t lose clients with modest returns and capital security but you will if there is serious capital erosion.

The CFS designation has given comfort to AIOFP clients to use our advice services but we had to give further risk mitigation reasons why they should proceed with recommending our CFS Private Client Advisers [PCA] to their constituents.

The Australian Financial Complaints Authority [AFCA] is very efficient and effective in sorting out poor strategic advice complaints but Product failure is another complicated long – winded matter. We are yet to know how the Compensation Scheme of Last Resort [CSLR] will operate but its existence should give further confidence to the third parties.

We think the most effective way to eliminate poor outcomes is to have an Approved Product List [APL] where a committee of AIOFP senior members will construct a list of products that must be used when dealing with specific AIOFP clients. These products will be mainstream and highly rated by professional Research Houses.

The AIOFP’s role in this service is a governance function to ensure all CFS members are maintaining their status and abiding by the rules of engagement to be a CFS Private Client Adviser [PCA]. We will be outsourcing part of this function to the highly regarded Institute of Financial Professionals Australia [IFPA] to maintain integrity and avoid conflicts in the process. Download the AIOFP CFS flyer here.

Attached are some details on the UK based COUTTS Bank that was announced at the conference for your consideration (click here to download).

COUTTS were established in 1692 and have many famous and wealthy clients around the world [including King Charles but they do not have an office in Australia to service their client base. The AIOFP has entered into an informal referral arrangement with COUTTS where AIOFP members can refer high nett worth clients to their services and Coutts will refer their clients to our CFS PCA Advisers.

If you want to protect HNW clients from local predatory Banking options, this may just be the solution, but they need to have at least $AUD5 million on deposit with COUTTS. [Nigel F can confirm this…..]

Also discussed at the conference is the NEXTRURAL opportunity where CFS PCA advisers will be used to assist the rural community around the country with sorting out their farming financial needs. We are also in discussions with 3 Industry Super Funds and corporates to provide services to their members.

With XMAS approaching and the holiday period we are targeting February/March as the start date for these services, more information in due course.