Advisers urged to know their own worth

Under the Future of Financial Advice reforms, advisers will be required to provide clients who are paying ongoing fees with an annual statement outlining the fees charged and the services provided in the previous 12 months.

Mr Klipin said the changes provided advisers with an opportunity to re-engage with their clients.

“There’s now a mandated opportunity once a year where you get a chance to have a value conversation with your client, which needs to incorporate a fee piece as well,” Mr Klipin told the AFA GenXt Sydney Roadshow this week.

“You can look at it as a fee conversation, or you can look at it as a value conversation. People just focus on price and where the lowest point is going, but if we have a conversation on value and talk about value in reference to price, then it’s a completely different conversation.”

Dean Lombardo, founder of Effortless Engagement, said the greatest risk of fee disclosure statements was advisers’ “cannibalising their own value”.

“Advisers need to gain complete clarity on the value they provide and ensure that that value is consistent, irrespective of whether new advice is provided or not,” he said.

“I don’t think that new advice or products are an illustration of value; rather, it is the progress that the client is making that is an illustration of value.

“Fee disclosure statements are going to give us an opportunity to understand our value and rethink our engagement process. “

AFA chief executive Brad Fox added that it was time for advisers to act on the imminent reforms.

“What you’re doing now or what you’re not doing now is going to reflect in the fee disclosure statements inside the next 12 months,” he said.