Next week’s Future of Financial Advice (FOFA) changes bring to a close the prospect of a sales career selling financial products – but only for the financial advice profession.
In a FOFA preview edition of his Trialogue blog, Tria Investment Partners managing partner Andrew Baker has outlined a number of the key changes taking hold, and also questioned why financial advice is the only profession to be targeted with a sales commission ban.
While conceding it’s not hard to argue that changes to sales incentives were needed, Mr Baker questioned whether the sale of financial products need a special regime.
“If so, why not real estate and other close substitutes as well?” he asked.
Changes to remuneration structures are also having an impact at the institutional level, with the purchase of Count Financial by CBA the “canary in the coalmine” signalling how hard it would be for businesses based on old remuneration models to transform for a post-FOFA world.
Institutions have a lot of history to review, with potentially conflicted arrangements going back 20 years or more, even though those involved in setting up such arrangements are long gone, he said.
But the approach institutions are taking is a conservative one, and in the process they are “re-setting the relationship between institution and planner (in favour of the institution of course),” noted Mr Baker.
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