Inside Money: Day of the panda - rare species of adviser spotted

Adorable, but endangered. Where are the independent financial advisers? Photo / Thinkstock

"It looks like we're becoming as rare as pandas," well-known Auckland financial adviser, Murray Weatherston told me last week after reading my investigation into the whereabouts of Authorised Financial Advisers (AFAs).

Under the rules of the game, Weatherston, like most if not all AFAs, is not allowed to refer to himself as an 'independent' adviser but that's what he would probably want to call the panda-like sub-group of advisers he's referring to.

(As an aside Weatherston is a former president and founding member of SIFA, the organisation previously known as the Society of Independent Financial Advisers.)

And to accelerate the possible coming extinction of New Zealand's 'independent' (referred to from now on as 'non aligned') financial advisers, AMP announced last week it had roped in four more groups into its fold under the 'AdviceFirst' brand.

The four firms John Grogan Insurances, Advice 4 U, Bob Edwards Insurance and Investments and Colin Strang Financial Services are insurance-oriented businesses rather than investment specialists but they were run by AFAs (except the Advice 4 U guy who had deregistered this April) all the same.

As the news story explains advisers in two of the businesses, Advice 4 U and Colin Strang Financial, are sticking with the new boss while John Grogan and Bob Edwards have presumably retired leaving their clients in the care of AdviceFirst.

These are bog-standard 'exit strategies' and nothing to be concerned about in themselves but it does bring the day of the panda that little bit closer to reality.

But the declining number of 'non aligned' was a worry for some advisers who responded to my report last week.

Alternatively, that rarity could be viewed as a valuable niche.

For example, Ben Brinkerhoff, head of adviser services at NZ Wealth, pointed out to me in an email that the firm has 15 fee-only independent advisers on its books. (NZ Wealth supplies services to the underlying advisers rather than operating as a 'group' per se.)

Another AFA, Tony Walker from the Takapuna firm, Future History (he also works part-time as an adviser with the Crombie Lockwood insurance business), said he offered a "fee-based general financial advice service" not predicated on any product sale.

"It would be interesting to know how many other AFA's around the country offer this type of service either as a standalone, or as part of a wider range of offerings," Walker said in an email. "There are many times when consumers do not require a product - all they need is someone to give them some good common-sense advice and point them in the right direction.

"This service has a value and should be charged for."

But maybe consumers who value that kind of service are also as rare as pandas.