Reflecting on comments made by CBA-aligned firm Menico Tuck Parrish indicating a client backlash to the “morass of administration” facing advisers in becoming FOFA-compliant, IRESS senior business development manager Michael Kinens said the required paperwork can also have an upside for advice firms.
IRESS has begun receiving “reports of clients referring business off the back of the FDS”, Mr Kinens revealed, adding that “compliance only becomes a burden … when it is addressed after the fact, or when the client experience is not well defined”.
Businesses struggling to meet the compliance requirements should consider adopting “paperless strategies”, Mr Kinens said, and making use of existing technologies such as eSignatures and the data feeds “both from the adviser’s desktop to providers and back again”.
“The good news for advisers is that technology can reduce the FDS and opt-in effort to practically zero,” Mr Kinens said. “The industry needs to focus on developing solutions that reduce the administrative burden placed on advisers and their staff and now is a really great time for advisers to pause and carefully consider how they are using technology within their businesses.”
At the same time, Mr Kinens warned that the adoption of the latest technological trends has “hamstrung” some businesses which have not thought through the strategy properly, warning that a financial advice firm needs to be sure about the technological strategy it embarks upon in order to achieve results.
“The adoption of the right mobile strategy for clients will enhance the client experience and result in a more engaged client,” Mr Kinens said.
FDS and opt-in requirements (after a few hours of initial work) have only added 1 extra process to our review preparation which takes around 3 minutes. It has also only added about 1 minute to review meeting times. It’s a non-issue. We use xplan and it’s so easy. We were already opting clients in annually at their reviews via a new written service agreement, which also clearly disclosed fees. So it’s business as usual for us. I dont see what the commotion is about…
The financial planning industry has not evolved or learned anything from the past other than to keep trying to justify high advice fees. One would have thought that advanced technology would and should have lowered costs of advice and sped up the advice delivery.
The younger generation won’t fall for high cost traditional advice no matter how dressed up it is or how it’s delivered. Milk you ageing clients for all they can pay now because it’s not to going to stay that way.
The technology is there and I agree with Michael, it’s just a pity the accompanying advice is still buried somewhere in the 80s and 90s.
Interesting, let me start by saying I don’t want to pass judgement on FoFA changes, other than to say I am opposed to Opt In.
The article is really about showing how technology can improve systems and processes and improve client engagement.
As professional advisers we need to acknowledge that the legislation is here to stay and we need to embrace it and turn it into an advantage for our businesses.
Here is an article that Zurich published explaining how we have used the FDSs to our advantage.
[url]http://www.zurich.com.au/conte…[/url]
We are extremely proactive with our clients, seeing and speaking with them on a regular basis and we still managed to obtain further business and referrals from them.
I am probably one of the advisers Michael refers to, as I have spoken openly to advisers about what weve done and the results.
Gerry,
I’d be more than happy to discuss any of the above in greater detail at your convenience. Feel free to either call me directly on 03 90185912 or email me at mkinens@iress.com.au
Gerry,
Please accept that not everything that is covered in an interview necessarily makes it into the published story, so sometimes the context can’t be fully appreciated.
You are correct in suggesting that removing these requirements makes the headache disappear. My comments shouldn’t be interpreted as suggesting that FoFA is right or wrong – they are addressing the fact that, for now, the requirements exist.
What I was hoping to highlight was that FoFA needn’t be the administrative burden that many currently experience, there are those that have realised opportunities from the exercise, and further, the REAL costs within our industry are as a consequence of the poor utilisation of technology by some industry participants (something that is outside the control of advice professionals).
You are kidding
Tech savvy advisers? The fact is if Xplan was easy to drive, there would not be a proliferation of Xplan outsourcing firms out there today.
Mr Kinens is correct – firms do need to be sure about their technology strategy – I’m just waiting for someone to invent something we can all drive, as frankly the clients don’t give a damn whether we use Xplan or its competitors.
Not happy with that article at all…I doubt FDS was supposed to be used as a marketing document and how could Iress possibly get feedback saying referrals were coming in. I already did regular reviews without having to stuff around with an FDS and fitting that in somewhere which is usually out of kilter with existing review dates.
If the FDS was the first type of review document sent out by an adviser for many years, then I would suggest the client should have moved elsewhere.
I acknowledge that advanced technology can make things easier…but so would removing stupid requirements, and concentrating on improved investment strategies and outcomes for clients.