Advice practices can save as much as $60,000 a year by automating the service benchmark data that goes into fee disclosure statements (FDSs), according to an industry consultant.
Each FDS must include the amount of each fee paid by the client in the last year; the services the client was entitled to in the last year; and the services the client actually received in the last year.
According to Enzumo chairman Andrew Rawlinson, planners are pretty well prepared when it comes to the fee component of FDSs – but they don’t have the back-office processes in place when it comes to the service benchmarks delivered to clients.
“FDSs are not just about fees. In fact that’s a small part of it. You’ve got to look at what you’re doing to automate the delivery of tracking and recording of all of the [service benchmarks],” said Rawlinson.
Service benchmarks differ according to client segmentation i.e. ‘platinum’ or ‘silver’ clients), and include services such as newsletters, phone calls, portfolio reviews and face-to-face meetings, he said.
Practices that use XPLAN can take advantage of the software to set up alerts when service benchmarks are due and whether or not they have been delivered, said Rawlinson.
When it comes time to produce a FDS, the information can be pulled from XPLAN rather than having back-office staff waste time and resources digging through client files, he added.
The opportunity cost of having to create service benchmark data manually could be between $50,000 and $60,000 per year for a 300-client practice, Rawlinson said.
“We’re expecting that there’s going to be a huge wave of demand [for our services] once 1 July hits and people start labouriously doing [an FDS],” he said.
The ifa Excellence Awards are back in 2021 and nominations are now open! This prestigious accolade recognises exceptional professionals within the financial advice industry, shining a light on the outstanding achievements from the nation's best and brightest. If this sounds like you or someone you know, then nominate today for the ifa Excellence Awards 2021!
The corporate regulator has cancelled the licence of a Queensland based SMSF advice firm that failed to lodge its financial accounts. ...
The Federal Court has issued BT and Asgard penalties of $1.5 million each for charging fees for no service and making misleading statements. ...
The wealth giant has announced a raft of further changes to its advice model, including the conclusion of client register buy-back arrangements for i...
Get notifications in real time and stay up to date with content that matters to you.
