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Elixir concerned about FOFA preparedness

Advisers are still showing worrying signs of being unprepared for the move to fee for service remuneration models, says Sue Viskovic of Elixir Consulting.

Despite being initially confident about the progress made by advisory businesses moving toward Future of Financial Advice (FOFA) compliance, Viskovic said it is now apparent some advisers are yet to make the move. 

“Most of the clients we work and come into contact with already either have fee-for-service models in place or are fairly on top of it,” she said.

“But it has become clear there are an awful lot of people who still aren’t prepared and haven’t even started to make the move.”

In conversations with advisers, Viskovic found blaming a lack of guidance from licensees and waiting to see the final FOFA regulations were common reasons given for under-preparedness.

“It’s actually very concerning because it takes quite a long time to get your head around a new fee model and then implement it with all the new structures and processes,” she said.

“Many advisers evidently still have to understand that it’s not just about deciding on a fee model and setting prices – they have to re-evaluate and possibly change their client engagement process, and look at their ongoing services.”