Issues confronting the financial advice sector are “increasing and intensifying”, according to Connect Financial Service Brokers CEO Paul Tynan.

He says there is a “vacuum of leadership and direction” and the viability and relevance of licensees has been “under constant question” since the advice model’s inception.

“No matter how often excuses are spun, it’s the potential and perceived conflict of interest of institutions that simply can’t be avoided,” he said.

“From its inception it has been impossible to defend and claim the process is in the best interest of the consumer and provides unbiased/uninfluenced advice when institutions are both the product manufacturer and owner of the licensee.

“It’s a situation that first evolved from the development of platforms in the 1990s, which laid the foundation for the current business model.”

Mr Tynan says the only way to test models is through the public eye – and it is inevitable that individual adviser licensing will be preferred.

He believes the concept will be resisted, not only by institutions afraid to lose influence and control of distribution networks but also regulators fearing a massive escalation in workload.

“Yet individual [licences] would immediately lift the public perception of advice, the industry as a whole, and be the catalyst for a revolutionary change to the dealer group model.”