Speaking exclusively to Risk Adviser, principal and owner of Brisbane-based Ascent Wealth Management, Stephen Nielsen, said that advisers running long-standing risk practices have already gone through a lot of change over the last 20 years as financial advice transitions from being an industry to becoming a profession.
However, he suggested such advisers work with people who are transitioning their businesses following the passing of the LIF bill through Parliament to get some ideas about what may be beneficial.
“The support will really come from the adviser network, I honestly believe, as opposed to being provided by the life companies,” Mr Nielsen said.
“I think we need to actually reach out to each other because the answers are in the room, but be a part of your community and listen and share.”
In his presentation to the AFA Genxt Conference last week, Mr Nielsen said an important by-product of his firm’s intergenerational wealth strategy, implemented eight years ago, was the new conversations he was having around remuneration.
“In a lot of practices, parents will actually pay for things like insurance premiums and to subsidise the cost of the advice budgeting and the other services that are provided to the next generation,” he said.
Mr Nielsen also explained how, with 60 per cent of his firm’s client base having an intergenerational advice element, he has integrated the complexities around aged care into his advice offering, pricing that accordingly.
“It’s not so much of a long-term relationship once a person moves into a shared facility. In that, we’re basically having them set for their dignity and comfort for the remaining time, so we really want to find a way to be remunerated for that piece of work,” he said.
“We would have a flat fee based around complexity, starting at $1,650 which would be the minimum fee.
“It sort of reflects the hours and time taken in getting that advice together. So it’s really helped having that conversation.”
Ha ha ha what a joke, Nielsen works for NAB!!! Riskadviser you should do your homework, this is a very misleading article. The bottom line is that Neilsen is clearly conflicted and Riskadviser should acknowledge this.
Most advisers have no real idea of the cost of doing business, they have no idea how LIF will benefit or attack their business and most don’t care, 120 today, 80 tomorrow, most don’t care as long as they are getting money for it and they will place the business where they always have. LIF is to the Advice Industry our KODAK moment yet no one is talking about it and in 3 years it will all be over red rover- I was in the states last year and saw the next technology jump that is going to occur and soon everything will be run by consumers, the Life companies know it and are getting ready for it, Underwriters know it and are ready, advisers have no idea and don’t really care till it is too late, but hey, it is what it is.
The biggest flaw in the LIF is rewarding the “churner” and penalising the incumbent. Hybrid comm or level comm is not a huge issue. Communication – most advisers i have spoken with over the last 27yrs have always answered the same way when asked how is business? “fine” and usually decline to say what they are actually doing. Its almost like a fear around being criticised or perhaps giving away a “secret” – so these advisers need to mature and share. we are, after all, in the same boat. Fee models are so varied and client segment specific there can be no one outcome. Hence, communication of models is more important to show what actually is being used out there.
Whether LIF went far enough or too far I have left for the likes of LICG to argue ad nauseam. I changed to a hybrid comm structure in 1993 and this has put me in very good stead over the decades that followed. With LIF now finally in place we have certainty for at least the next 3 [or so] years to further fine tune and adapt to inevitable further change. I fully concur with Stephen. Working and sharing with industry colleagues is the way to go. Also, having a NON-institutionally owned Licensee adds benefits and a sense of wellbeing to someone in my position.