- No (64%)
- Yes (27%)
- Not sure (9%)
Will your advice practice be moving to fee for service?
Our latest poll is taking the pulse of advisers on whether they are considering a move to fee for service.
Our question is:
Will your advice practice commence transition to a fee for service remuneration model in the next twelve months?
The debate over commissions versus fee for service will not go away, and has seen new layers added over recent weeks:
- The FPA has backed the retention of commissions as a remuneration option for risk products
- Godfrey Pembroke and Hewison & Associates has each declared it will move to an exclusively fee for service advice model, including life insurance
- New business tools are emerging to assist advisers looking to move to fee for service models (see Fee for Service Business Tool)
While the AFA and many financial advisers continue to maintain their stance on the need for the industry to allow advisers and their clients the choice of remuneration models (accompanied by appropriate disclosure), there is growing impetus for a future financial advice industry that totally separates advice fees from products, especially across superannuation and investments.
We want to know whether your practice is looking at fee for service, at least for super and investment advice, and will be commencing this transition in the coming year.
While we await any developments that may emerge as the industry consults with regulators over adviser remuneration (as recommended by the Ripoll Inquiry), we want to know your intentions now.
Are you waiting for more developments or resolutions or legislation or are you commencing a move to fee-based advice before you may be forced to do so in future? Or are you fed up with the debate and believe a commission-based practice, with full disclosure, will continue to ethically and efficiently serve your clients?
Tell us what you think. Cast your vote and make your considered comments below.
Costs of compliance and the current regime need to be looked at in conjunction with the misguided notion that advice is linked to the payment in most cases. In most cases advice is provided and the fee for that advice is channelled via a product. This is usually discussed with the client and agreed to…clients deserve this payment method and choice. BUT if the lawyers continue to dominate the industry in the belief that another 10 pages of disclosure will save the industry or the client from harm will only continue to drive up the overall cost to the consumer as advisers struggle under the additional costs to meet the already onerous compliance requirements. We do not operate under a CAR advice structure and as such the costs of lenghty SOA’s that are widely never read by clients just proves that we need better advisers not more disclaimers and legal rhetoric.
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