CoreData reports the majority of advisers fear their professional indemnity costs will rise if the Ripoll Inquiry Recommendations are implemented.
In a survey of almost 250 advisers, following the tabling of the Ripoll Inquiry Recommendations last week, CoreData said that 57.5% of respondents expected their professional indemnity premiums will increase because of these Recommendations.
Further, CoreData reports that more than 80% of those polled believe the Recommendations, if implemented, would increase costs for financial advisers.
With most advisers in the survey (76.4%) agreeing that the Recommendations will bring big changes to the financial advice industry, many believe these changes will come with a cost to them, in terms of increased practice costs and higher professional indemnity premiums.
Advisers and the rest of the financial services industry will have to wait until the outcomes of the Cooper and Henry Reviews (into the superannuation and taxation systems), to find out exactly which Recommendations the government intends to implement and what impact they will have.
Other key findings from the CoreData survey include:
- Almost two thirds of respondents (64.3%) disagree that payments from product manufacturers to financial advisers should be ceased
- Three quarters (76.8%) do not agree that conflicts of interest will be stamped out if the Recommendations are adopted
- While 89.3% agree financial advisers should have a fiduciary duty to place clients’ interests ahead of their own, opinion was divided over the impact this would have on the advice industry
- 97% support making the cost of financial advice tax deductible for consumers (implying that 3% do not!)
Click the following links for details regarding the Cooper and Henry Reviews, including their terms of reference:
