Association of Independently Owned Financial Professionals (AIOFP) executive director Peter Johnston hits back at the organisation’s critics.
Over the 15 years the press has continually reported the development of Personal Choice Management Pty Ltd (PCM) as being the activities of the AIOFP. The directors of the AIOFP and PCM are frustrated with the continual confusion and would finally like to clear the matter up.
The AIOFP is a formally registered Association but its activities are totally different to the other Associations. There is no template or stereotype on how an association should conduct itself as long as it acts in the best interests of its members.
Our founding objective was to further the commercial interests of members, so it makes perfect sense that the AIOFP uses its members’ scale to negotiate superior wholesale arrangements on a wide range of essential services to operate a practice and deliver benefits to their clients.
Private label structures, research, PI insurance, compliance service, member legal protection, new client referrals and commodity discounts are our core business activities. Back in 1998, and as it is today, it was fruitless us becoming another ‘vanilla’ association offering similar services to the other market participants.
What is the value of very similar entities offering very similar services? We think two is plenty. The AIOFP’s point of difference is developing and managing essential services to independently owned practices of all sizes, and not having any institutional influence in its management or membership.
PCM is a member owned AFSL holding company that negotiates commercial contracts with administrators/manufactures and trustee/RE services to deliver more cost effective services to members and their clients.
PCM leverages off the scale of the AIOFP membership to negotiate outcomes for all stakeholders. PCM’s latest activities are to develop private label platform solutions that give ownership, equity and control to the advisers. We have managed to achieve this by still using the custodial, administration and security of a major bank.
This now gives an option to the independently owned advisers who don’t want to use traditional SMSF solutions but wants to keep control of clients and their FUA. Contrary to some market myths PCM does not deal in platform rebates from product manufacturers, it embeds a margin after negotiating institutional rates with the manufacturer. This margin is then returned to shareholders in the form of a quarterly dividend and is not considered conflicted remuneration under FoFA.
By Peter Johnston, AIOFP executive director.
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