Keep client communications in the control of advisers

The passing of the Financial Sector Reform (Hayne Royal Commission Response) Bill in Parliament recently has seen a spotlight being shone on the issue of who owns the relationship with clients – advisers or the trustee/platform?

Reforms to be implemented on 1 July 2021 require superannuation fund members to consent to trustees deducting ongoing adviser fees.

Many advisers have been surprised – and annoyed – to find out that some platforms have been contacting their clients directly, without their knowledge, some six months in advance of the legislation being introduced.

It is not the first time that some platforms have directly contacted clients of advisers. For instance, some platforms got a head start on regulation by switching off fees and commissions early. Grandfather commissions were turned off by CFS in advance of the 1 January 2021 deadline.


It raises the question of who owns the relationship with clients? And is this direct client contact by platforms without adviser consideration a regulatory requirement, a disconnect with advisers’ relationship with clients, a reactive action to reduce liability, a lack of technology innovation in the means to obtain consent or a combination of all these?

Clearly, the aim of the reforms is to protect consumers. However, it can be argued that the direct contact from platforms – often without the knowledge of the adviser – have caused unnecessary concern for clients.

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It is understandable that they would find a letter, out of the blue, saying that the platform is reviewing their account for the adviser service fees for the last 10 years, disconcerting to say the least.

Advisers also find it uncomfortable to see platforms and trustees contacting their clients directly.

Many would argue that contacting their clients without the involvement of the adviser nor with the input of the adviser does not seem to align with the platform’s promise of helping advisers and delivering better client outcomes and experiences.

It will be interesting to see how this plays out from here.

With the exit of the banks from the wealth management industry, and the migration of those advisers away from aligned distribution, the choice of which product, platform or service is more than ever in advisers’ hands. That shift, while a relatively new paradigm, is certainly one for advisers to consider in the context of who controls the narrative with their client.

Platforms such as WealthO2 that offer bulk emails and bulk reporting, electronic digital signature workflows that allow advisers to control the content and “push and pull” of communications to the client, storing the compliance documents and activating consent based workflows, will no doubt be an attractive option for many advisers. Another consideration are the providers that have integrated digital signatures and alignment of adviser opt-in and annual fee arrangements with the reform requirements.

Many platforms have taken a hardball approach with advisers of “provide the separate consent form we mandate, or we will turn your fees off”. This rather blinkered approach doesn’t take into account the annual review process where the client is consenting to fees already. Many platforms also don’t have the ability to generate a digital consent-based workflow and revert to a paper trail, adding more administration to the adviser process.

If the industry is to work together to ensure advisers can offer the best and most efficient advice to their clients, and act in their best interests, then taking a siloed and sometimes combative approach, like some platforms have done, is not the way to go.

Giving advisers the control of the narrative, branding of communications and embedded compliance workflows is a much better way of demonstrating their support of advisers.

Shannon Bernasconi, managing director, WealthO2

Keep client communications in the control of advisers
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