IOOF general manager of distribution Renato Mota told ifa that various stakeholders are feeling pressured by the FOFA fee disclosure requirements.
“We deal with advisers with very different business models and a lot of them, particularly those in the boutique space, are struggling with fee disclosure, and so we’ve attempted to provide some assistance,” he said.
“In the latest release of our FOFA guidance we have addressed what we see as the single biggest challenge facing advisers right now which is the roll-out of the FDS, and how businesses are going to collate all the necessary information without losing efficiency.”
Mota said that while many “grey areas” still exist with regard to fee disclosure and that further guidance from the regulator is necessary, that the updated IOOF guidance attempts to assist with both the format and implementation of fee disclosure statements.
For example, the updated guidance advises that “the information contained in the FDS should be consumer friendly, concise and easy to read” and that fee disclosure information needs to be separate from other documents such as statements of advice, but that a variety of media can be used to provide the information, including face-to-face meetings.
The guidance also confirms that there “is no requirement to issue a FDS if a client enters into a payment plan” i.e. a contractual arrangement whereby the client is unable to legally opt-out of payment of fixed instalments over a set period, as well as offering practical advice on what to do where a relevant disclosure date cannot be identified.
While many advisers are reportedly looking to platform providers and technology for support, Mota said that licensees need to “assist advisers [to] implement their fee disclosure process efficiently once they’ve decided the route they want to go down”.
Gerry, Terry has a new business and a small business by my reckoning. We’ve been fee for service for 11 years but we have issues which at present, short of placing a new staff member to deal with this FDS issue, we will struggle to deal with. Of course if I was a gov’t dept that would not be a problem, just another tax payer funded flunkie. As a client first for profit business it IS a problem.
FOFA is a joke, firstly let’s level the playing field with industry fund network (1/3 of directors being independent is 1/3 too many obviously!!) then let’s start to talk about client best interest.
Most of the proper advisers would thrive under this, rather than running to insto’s and wrap solutions which is surely a “client best interest” solution???
Good onya Terry, ya for the Communists.
FoFA is a flop Terry…..good to see you’re on here bating everyone again though….lol
Get used to FOFA, as the opposition have only signalled an “opt in” change thus far. Relying on the likely change of government to remove FOFA is folly.
It is with us, and there are those who are prepared, and those who aren’t. All the griping and whinging is too late. The FOFA horse has bolted!!
Never have so many spent so much time on changing something that didnt need change and doesnt add to an investors cost. Its a bit like non medical people telling doctors what medicine to prescribe to patients who are not ill. This industry is fast getting out of total control and its time planners got off their butts and let the legislators know what they think . The communistic approach taken by the present government to ensure one size fits all will not work and will stop joe citizen from seeking advice because basically they wont be able to afford the service . FoFA is a joke that has been cobbled together by public service pension recipients who wouldnt recognise a planner if they sat in front of one .
still trying work the point FDS, how many times to you need to tell a client. how much they paid, so should your remove the fee disclosure section in an SAO??
Hopefully this is the first piece of bad labor legislation the coalition will remove when they come into Power in November 2013.