A survey of advisers has revealed huge underlying hostility towards Future of Financial Advice (FOFA) changes, with many convinced there will be little to no benefit from the changes and contemplating leaving the industry.
The survey - conducted by planning software provider Midwinter - of predominantly boutique and mid-tier group advisers, found 18 per cent of respondents expected a positive impact on their quality of advice, while 30 per cent said it would have a negative effect and 51 per cent expected no change.
Midwinter managing director Julian Plummer said it was “shocking” that 80 per cent of the 330 respondents did not think FOFA would be good for quality of advice.
Further, they did not anticipate and benefit the adviser public image, with just 30 per cent predicting a positive impact on the reputation of planners, 43 per cent saying it would have no impact and 27 per cent expecting a negative effect.
Plummer also said he was amazed that more than half of respondents, or 185 advisers, said they were considering leaving the financial planning industry as a direct result of FOFA.
Many of the comments described FOFA as a “waste of time” and said it was designed to favour, or was even being driven by, the industry super fund sector. Many also expressed hostility to the current Labor government and looked forward to the next election.
“More compliance, yet I do not see how it will get rid of the shonks or improve the behaviour of the product floggers in the industry,” said one.
Others said: “Large impost on planners no real gain for the client”, “more costs for non-aligned practices to bear, making it more likely these practices will have to leave”, “it will not help the client one bit”, “the rich will get richer and the poor will get poorer, the cost of doing business has doubled”, “corporate super has been decimated through all of this”, and “bunch of bureaucratic crap”.
There were a handful of supporters though: “Creates huge opportunity for right strategic business model to improve client outcomes, particularly cost / fee reductions”, said one.
“The industry has suffered as a result of advice centred on the best interests of the adviser rather than the client. FOFA will greatly improve the professionalism of the industry,” said another.
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