Of the 50 dealer groups reviewed in the ifa Top 50 Dealer Group Survey 2012, 38 said opt-in would affect their business model when the Future of Financial Advice (FOFA) reforms are implemented on 1 July next year.
AMP Financial Planning’s managing director, Michael Guggenheimer, says that generally, implementation of FOFA measures such as opt-in will spark a change in business processes overall.
“Opt-in, like other aspects of FOFA, will require change in business processes for AMP Financial Planning – and practices,” he tells ifa. “We are committed to working with our practices to make sure everyone is in the best possible position, given that changes are inevitable.”
RBS Morgans has also noted that the opt-in requirements will impact the group’s business.
Managed branches director John Lindsay tells ifa that despite the onset of the changes RBS Morgans will continue to improve its service delivery model and its associated documentation.
“All this brings with it increased compliance and training requirements, which over time will ultimately provide the client with higher levels of confidence and satisfaction in the services we provide,” he says.
The FOFA reforms focus on improving the quality of financial advice, particularly product recommendations, and expanding the availability of more affordable forms of advice.
They are expected to ultimately improve investor protection and instil confidence in the financial advice industry. Opt-in and fee disclosure is one of the key components.
Advisers will be required to request their retail clients opt in or renew their advice agreements every two years if they are paying ongoing fees.
In addition, an annual statement outlining the fees charged and services provided in the previous 12 months must be provided to clients paying ongoing fees. This means advisers will be in regular contact with, and will need to demonstrate the value of the services they are providing to their clients.
As an alternative, the Australian Securities and Investments Commission (ASIC) has been given the power to exempt advisers from the opt-in provisions where they are bound by a code of conduct, approved by ASIC, which achieves the same outcome.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 20 Jul 2018CPA shuts financial advice divisionBy Reporter
- 20 Jul 2018Don't neglect AI, advisers warnedBy Tim Stewart
- 19 Jul 2018AMP unveils new in-house training programBy Reporter
- 19 Jul 2018Self-licensed adviser cops 4-year ASIC banBy Reporter
- 19 Jul 2018Hub24 to launch new core offeringBy Reporter
- 19 Jul 2018SMSF sector warns about advice ‘exodus’By Miranda Brownlee
- view all