Ethical certification for advisers launched

Advisers can now obtain an ‘ethical financial advice’ certification.

In a statement, advice consultancy firm Certainty Advice Group announced it has launched a certification mark for ethical advice — dubbed the ‘Certainty Advice’ mark.

“The mark certifies advisers who adhere to include common approaches: how value is determined for clients, how clients are engaged and re-engaged every year, and how advice is priced without conflict. Being comprehensive and priced on value, it’s different from what most clients have experienced,” Certainty Advice said.

Managing director of Certainty Advice Group Jim Stackpool said, “Since 2005, we have always had a simple objective — consistent and methodical delivery of comprehensive and ethical advice without any real or perceived conflict or incentives. So by creating this new certification mark — called Certainty Advice — we are certifying our approach to not only make it accessible to more advisers, but more Australians.”

Mr Stackpool believes that while the new certification will take some time to take hold in the financial advice world, it will ultimately deliver comprehensive and ethical value for more Australians every year, the statement said.

“It’s not for every adviser, but I do believe this form of financial advice will be more accepted by most Australians by 2030,” Mr Stackpool said

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Increased number of advisers using smart beta

At least 50 per cent of financial professionals are using smart beta strategies in client portfolios with outperformance the biggest draw, followed by lower costs compared with actively managed funds, research from VanEck has stated.

According to VanEck’s second annual smart beta survey, 91 per cent of financial advisers and brokers believe smart beta strategies will outperform or perform in line with active strategies, while just 9 per cent think smart beta would underperform.

Managing director at VanEck Australia Arian Neiron said, “The survey reveals smart beta strategies are quickly gaining traction among investment professionals.

“We are nearing a tipping point where smart beta ETFs will become as prevalent as market cap weighted ETFs given their strong performance and cost advantages compared to active funds.”

Smart beta ETFs combine aspects of active and passive management by tracking indices that deliver a targeted investment outcome. Yet they retain the transparency, liquidity, ease and rules-based approach of market capitalisation based ETFs, VanEck said.

“A clear sign that smart beta is winning backers is that 73 per cent of financial professionals using smart beta are ‘very or extremely satisfied’ and only 1 per cent are unsatisfied,” Mr Neiron said.

“Another sign that smart beta is gaining traction is its broader use by all investment professionals, including advisers working with the big banks. While IFAs were the early adopters of smart beta, aligned advisers are now the fastest growing users.

“Investors are now realising that active funds do not always achieve higher returns than the benchmark and are seeking more cost effective and transparent options to achieve investment objectives.”

The VanEck survey results were based on the responses of over 150 Australian-based financial professionals working in an advisory capacity in Australia.

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