Financial services licensees have been warned they will need to offer advisers choice of platform on approved product lists (APLs) in order to attract and retain advisers.

Pinnacle Practice director Anne Fuchs says advisers are well aware they have the primary relationship with the client and do not want their dealer group telling them how to run their business.

But she says additional pressures from the Future of Financial Advice (FOFA) reforms and difficult market conditions make the platform issue “more emotionally charged than ever”.

Ms Fuchs says many institutional licensees are reducing their APLs, citing the FOFA best interests duty, and non-institutional licensees believe they have to follow to survive.

She told insuranceNEWS.com.au that opinion is divided on the best interest duty, with some licensees restricting their APL because they do not want to be seen to be “across the universe” on products. 

“Most will say they can meet clients’ needs from a restricted APL,” she said.

But she believes restricting choice to advisers will drive them away. She says young advisers in particular want platform choice because they are looking at their careers in a different way.

“They have many years ahead of them as professional advisers and are not interested in making money out of a product,” she said.

“Their value offering is about the delivery of advice, and therefore they want to be able to use the products that are most appropriate for their clients’ needs.”