In a recent blog post for the FPA, the research house’s managing director Jason Andriessen noted that more than half of advisers had increased their fees in the last six months, according to CoreData’s Quarterly Adviser Pulse Check.
“And those fee increases have been material – around two in five of planners who increased their fees did so by more than 10 per cent,” Mr Andriessen said.
“Unfortunately for clients, this appears to be just the start. The research also shows that around seven in eight financial planners already have plans to increase fees again, and half of them expect to do so within the next six months.”
Mr Andriessen drew a common conclusion with the UK’s Retail Distribution Review, which occurred in the late 2000s and saw a large proportion of advisers leave the industry while fees increased significantly.
“After the Retail Distribution Review changes were implemented, the experience in the UK was milder than the Australian experience. The number of financial planners in the UK decreased by 18 per cent between 2009 and 2013, but it still impacted negatively on consumer access to advice,” he said.
“In Australia, financial planner numbers are already down by more than 25 per cent, and the higher education transition period still has years to run. In the UK, client fees increased by an average of 15 per cent. In Australia, that figure could be much higher.”
Mr Andriessen said with ASIC levy fees, PI premiums and dealer group costs rapidly rising, along with the significant demands of the FASEA framework, “something has to give” to allow advisers to keep offering their services at an affordable level.
“Most financial planners don’t want to price their services out of reach for potential clients, but circumstances are forcing their hand,” he said.
“With rising education requirements and new professional standards, now is the time for a regulatory paradigm shift to enable more affordable advice.”
ASIC & the Fed Liberal Govt driving adviser numbers from 28,000 down to 14,000 (by 2026) is an absolute disgrace. They are simply inept.
Not only am I increasing my fees significantly, I refuse to see clients that really need my help and sending them straight to their provider. I hate the world in which FP has become. My favour clients were the ones I am now sending away…. WHY??? they cant afford the advice……. they dont understand why we once serviced them but now we cant???….. ask the government why or ASIC??…… grandfathered commission used to pay me for that work now its not viable and I have to do a 70 page SOA if i want to talk to you. THATS RIGHT COMMISSION WAS BAD but fees are only for the rich……
I don’t believe you. Have operated on 100% fee for service and about 70% of the clients that come to see me are ok paying it. Maybe instead of turning people away you should figure out a way of helping (and charging) them.
I believe sir you are an investment adviser moonlighting as a risk specialist to show value in your expensive fee for service model…… Im glad you gave me your opinion but I dont believe you either……
[quote=KC]Where are the FPA and AFA on this matter…..crickets????[/quote][quote=KC]Where are the FPA and AFA on this matter…..crickets????[/quote]
Really, they have provided material to assist with lobbying the government through your local member. Have you not lobbied your local member yet?
crickets………..
I’ve lobbied my local member, I may as well have spoken to a dead cat.
FPA solution, get rid of licensees (now that their main clients, the banks have left)…a hail Mary to try to save their relevance and membership. No other association has overseen the destruction of the industry it “represents” better than the FPA.
how can politicians be so one dimensional.. stupid.
Where are the FPA and AFA on this matter…..crickets????
The Government, Lawyers and Consumer Groups fought tooth and nail for a Fee for Service financial advisory sector akin to how every other profession charges for advice (i.e. Lawyers, Accountants, Doctors, Dentists, Engineers, etc). They also required Financial Advisers to be degree qualified. Now they have what they wanted but yet they expect Financial Advisers to work for peanuts? They wanted “Fee for Service”….they got it. They wanted “Professionals” ….they got it. Now they must pay for Financial Advice that can only be delivered in a commercially viable manner. I don’t see Lawyers or Accountants reducing their fees…EVER.
One day ASIC will have no need for any financial services analysts or delegates as the only people still receiving financial advice will be wholesale clients with no paperwork to review, criticize or destroy an Adviser’s career and reputation over. In the process they would have done far more damage to the general public’s financial situations and outcomes than any Adviser who’s been banned due to differences of opinions between public servants and Advisers regarding the advice given, and those who’ve been banned for paperwork/administrative infractions that have no negative impact on clients or the quality of the advice whatsoever. ASIC – destroyers of the industry they supposedly regulate, the consumers who require advice and those who do their best to provide the advice. Still waiting for the ex-heads of the regulator to be banned from future positions and careers also as any Adviser would have been if they’d stolen money from clients just as ASIC’s representatives stole money from tax payers.
financial advisers in Australia have to abandon ship….
Government determined to cause us to price ourselves out of the industry, to leave because it’s become to expensive to stay, but either way they will destroy the secondary markets at the expense of reduced liquidity and ineffective asset allocation which will see the primary markets exit the market. Then let’s see them try and run the economy with no debt or capital raising taking place.
ASIC had to put its fees UP, haven’t they been paying the company of Former Chair of the FPA over $440,000 in fees over the past few years, even in the year he was the FPA Chair??
ASIC aren’t getting any levies from the Big 4 Banks because they got rid of their Advisers…..they caused the problems, they bailed out, and therefore ASIC has no issue chasing them….Advisers leftover have to pay more….
PI market is shrinking and excesses are higher, premiums higher……Advisers leftover have to pay more…..
Advisers have to go back and do a Degree at $2500/$3500 per Subject…….Advisers leftover have to pay more…..
And they talk about making advice more affordable???? This review will only consist of making Advisers more accountable about how they charge, we must show cause for charging fees….??
Hmm, I wonder how Lawyers would take it if they were limited to how much they can charge…..?? Not well I suspect…
No wonder 50% of Advisers will leave the Industry by 2026……
It is a sad environment for the industry when the user pay system has come about after ASIC failed to act on many matters until the RC. Happy to get funds through the Federal Govt year in and year out to pay for its reactive and inefficiencies.
My fees are going up (again) on 1 July 2021 when the adviser opt-in red tape fiasco starts. I have already notified clients and they understand the reasons for doing so.