Our latest poll suggests the prospect of banning risk commissions and of client opt-in for future advice services are the two main causes of concern for advisers as we launch into 2011.
At time of writing, 59% of those responding to our poll said the prospect of banning risk commissions was their greatest concern to the question:
Which single issue will have the greatest impact on your advice practice in 2011?
Almost one in four advisers (23%) said client opt-in for future advice was their main worry, while all other issues, including the performance of the economy, have attracted only a small proportion of votes.
One comment we received seems to reflect a widely-held point of view amongst the financial adviser community. The adviser agrees the potential bannig of risk commissions is a big concern:
“… but I just can’t see this government doing that as the effects will be disastrous both for advisers and the consumer.”
The same adviser goes on to add a further comment that again seems to reflect a widely-held view amongst advisers:
… it is not the commission remuneration that is the issue but the quality and appropriateness of the advice
“… it is not the commission remuneration that is the issue but the quality and appropriateness of the advice.”
The mood of the meeting in relation to client opt-in for future advice may well be encapsulated within this comment we received:
“Client opt-in requirements will be an administrative nightmare.”
While the future of risk commissions remains uncertain, despite the widespread lobbying to retain it, advisers can be confident that client opt-in, in one form or another, will definitely form part of the future financial services landscape within the Australian market.
But the response to our poll so far has also served to highlight that advisers have accepted the inevitability of a future without investment and superannuation commissions. Only 1% say this is the issue that will have the greatest impact on their practice and only another 1% say their greatest concern is about transitioning to fee for service.
Our poll will remain open for another week, so if you have yet to do so, let us know what you think…
