Core Philosophy

The Professional Adviser Standards Framework

Regulatory minimums are designed to prevent catastrophic consumer harm, not to define excellence. The Institute of Advisers mandates a higher operational threshold. These are the standards required to run a structurally sound, highly profitable, and entirely conflict-free advisory practice.

1. Structural Independence

We reject the premise of vertically integrated distribution networks masquerading as financial advice.

  • →
    Zero Manufacturing Ties: An advising firm must not mandate the use of an in-house platform, in-house DFM, or proprietary fund range. The conflict of interest is insurmountable when the adviser's firm profits twice from the same client asset.
  • →
    Agnostic Platform Selection: Platforms are administrative utilities, not strategic partnerships. They must be evaluated solely on total cost of ownership (TCO) and operational efficiency for the client's specific tax wrapper needs.

2. Transparent Compensation

Contingent charging inherently biases advice toward action (specifically, asset transfers). We advocate for fee models that reflect the actual complexity of the work.

  • Separation of Planning and Implementation: Initial financial planning must be charged as a distinct, fixed project fee. It must be payable regardless of whether financial products are subsequently purchased or transferred.
  • Justification of Ad Valorem: If charging an ongoing percentage fee (AUM), the firm must mathematically prove that the cost of servicing larger portfolios increases proportionally to the fee extracted. If it does not, a tiered fee structure or flat retainer must be implemented.
  • Strict Prohibition on Provider Remuneration: No commission, override, marketing allowance, or "software subsidy" may be accepted from any product provider or asset manager.
Calculate Your Minimum Fixed Fee

3. Evidence-Based Investment

Advisers are financial planners, not star fund managers. The attempt to generate alpha through tactical asset allocation usually destroys client wealth.

Passive Default

The default assumption must be low-cost, globally diversified index trackers. Active management must only be employed where the asset class is highly illiquid or demonstrable persistent alpha exists (e.g., certain alternative sectors).

Centralised Investment Proposition (CIP)

Firms must utilize a strictly governed CIP. Bespoke portfolios for standard clients create operational drag and massive compliance risk regarding suitability drift.

4. Capacity and Client Care

A failure to restrict capacity is a failure of professional duty. A single adviser cannot adequately manage 300 households.

"An adviser's capacity is constrained by the mathematical reality of working hours minus administrative drag."
  • • Maximum active households per adviser: 120 - 150 (assuming full paraplanning support).
  • • Minimum annual review standard: A documented, synchronous meeting (virtual or physical) verifying suitability, tax status, and capacity for loss.
  • • Mandatory offboarding: Unprofitable clients must not be cross-subsidized by wealthier clients. They must be repriced or politely disengaged.