Fee disclosure the 'biggest challenge'
IOOF has described fee disclosure as the industry’s single biggest challenge, following the financial services giant's update of Future of Financial Advice guidance for advisers across its dealer channels.
IOOF general manager of distribution Renato Mota told ifa that various stakeholders are feeling pressured by the FOFA fee disclosure requirements.
“We deal with advisers with very different business models and a lot of them, particularly those in the boutique space, are struggling with fee disclosure, and so we’ve attempted to provide some assistance,” he said.
“In the latest release of our FOFA guidance we have addressed what we see as the single biggest challenge facing advisers right now which is the roll-out of the FDS, and how businesses are going to collate all the necessary information without losing efficiency.”
Mota said that while many “grey areas” still exist with regard to fee disclosure and that further guidance from the regulator is necessary, that the updated IOOF guidance attempts to assist with both the format and implementation of fee disclosure statements.
For example, the updated guidance advises that “the information contained in the FDS should be consumer friendly, concise and easy to read” and that fee disclosure information needs to be separate from other documents such as statements of advice, but that a variety of media can be used to provide the information, including face-to-face meetings.
The guidance also confirms that there “is no requirement to issue a FDS if a client enters into a payment plan” i.e. a contractual arrangement whereby the client is unable to legally opt-out of payment of fixed instalments over a set period, as well as offering practical advice on what to do where a relevant disclosure date cannot be identified.
While many advisers are reportedly looking to platform providers and technology for support, Mota said that licensees need to “assist advisers [to] implement their fee disclosure process efficiently once they’ve decided the route they want to go down”.
AIOFP ‘appalled’ by ANZ shut down of adviser revenue
EXCLUSIVE Industry body the Association of Independently Owned Financial Profess...
Government reveals new financial services minister
The federal government has named a new Assistant Minister for Superannuation, Fi...
Maurice Blackburn chosen to undertake class action against AMP
Law firm Maurice Blackburn has been selected by the NSW Supreme Court to underta...