FAQ

Yes. Most financial advisers have what’s called an “Approved Product List” (APL). This usually means that they can only recommend or give advice on products that are on their list, which has been compiled for them by their Australian Financial Services Licensee. So if you ask them about investing in a product that isn’t on their list, they won’t be able to recommend it. (It would be like asking a Ford dealership which Holden you should buy.)

Financial advice is largely vertically integrated. This means that firms are ultimately controlled by those at the top. Over 80% of financial advisers are controlled by the Big Four banks (Commonwealth Bank, NAB, Westpac and ANZ) and AMP. This greatly limits the options they can offer clients.

Periapt Advisory, as an independent advisory, is unrestricted in the products that can be recommended. There is no APL, and we are free to examine the full range of available products to find the one that best suits your own unique circumstances.

No, independence has a very special meaning, and it is more than not being owned by a product manufacturer, such as financial institutions like banks and superannuation funds.

It also means that fees are not charged as a percentage of your assets. So, it doesn’t matter if you have $100,000 or $1,000,000, our fees will be based on the scope and complexity of the advice sought.

This is important because when adviser fees are linked to the size of your assets, there is a real incentive for the advisers to want you to have lots of money invested through funds or other entities they get to charge a percentage of.

This often leads them to recommending advice that is more in their interest rather than yours.

Independent advice is free from such conflict. There will be no asset-based fees, which really are just commissions by another name.

Commissions can be useful in some industries. For example, if you hire someone to sell something for you, then offering them a commission rather than a flat fee can motivate them to achieve a higher sale price. Unfortunately, in the financial planning world, it’s not you doing the selling, it’s the product providers (banks etc.) via financial advisers.

It is not hard to see that that there is a strong incentive for advisers to sell you the product that will pay them the highest commission, rather than the product that is best for you.

Independent advice firms such as Periapt Advisory pass all commissions on to clients. In this way, you can be confident that the product we recommend is the one we have identified as best for you, not us.

It is. “Independent” is actually a restricted term under Section 923A of the Corporations Act 2001 (Cth). Entities which use this term must:
– Not receive commission without rebating it in full
– Not charge asset-based fees
– Not have ownership links of affiliations with product issuers

Australian finance experts such as Scott Pape (aka “The Barefoot Investor”) and Peter Switzer, plus the disclaimers at the bottom of most general advice articles, advocate strongly for independent financial advice.

It has been said that there are two types of people in this world – those who wonder “Why would I pay anyone to do something I could do myself?” and those who believe “Why would I do anything I could pay others to do for me?”

The first group of people would be very keen to ensure they were receiving advice that is in their best interests and no-one else’s, so if that is you, then you might prefer to firstly check out the useful links in the resources section. The MoneySmart website operated by the Australian Securities & Investments Commission is an excellent tool and it may have the answers you’re looking for. The Australian Taxation Office also has a lot of information, some of which is in easy-to-follow videos, and should be looked at as well. If you still think after looking at these sites that you would like professional, independent advice, please keep reading.

The second group of individuals are the ones who are happy to pay someone else to do things like mow the lawn, clean the house, change their oil in the car – all things people once did for themselves. Perhaps they can earn more in the time they would have spent paying someone else to do these things, or perhaps their spare time is precious and saved for leisure or family/friends. Maybe both. These people are quick to see the value in hiring someone to create for them a financial strategy so they can carry on with the rest of their lives which they are the experts in.

The important thing is that the advice should be independent and of a high quality.

Not as hard as it used to be. The Australian Securities and Investments Commission (ASIC) has restricted the use of the term “independently owned” to only those who meet the strict definition of “independent”, so that has helped. Furthermore, the Independent Financial Advisers Association of Australia (IFAAA) exists in order to bring together advisers who operate according to the high ethical standards of independence. You can read more about them here.