Well-known business coach, Dan Sullivan, has offered his insights to the Australian financial services community regarding the changing nature of financial advice and how advisers will be remunerated in future.
Mr Sullivan’s thoughts are contained in a brief interview conducted by Queensland adviser, Mark Westcott, who recently attended a Dan Sullivan Strategic Coach workshop in Chicago. Mr Westcott operates his own advice practice and also delivers services for other advisers via his ClearFlyte business solutions consultancy.
In his interview, Mr Sullivan acknowledges the trend to ‘commoditisation’ of advice and the transition in Australia from commissions to fees for investment and superannuation advice, driven not just by regulatory reforms but also by what is a global trend that links the amount paid by the client to the value of the advice provided, rather than by the size of the investment or the sum insured.
… it would be expedient for any adviser to ensure they develop a value-based remuneration model
Irrespective of the banning of investment and super commissions in Australia from 1 July 2012, Mr Sullivan suggests it would be expedient for any adviser to ensure they develop a value-based remuneration model.
Mr Sullivan says this principle may also apply to remuneration for insurance advice. His message to advisers is that there is no issue with continuing to be paid by commission for risk advice while this form of remuneration is still available. But he points out there already exist alternative, fee-based models for risk advice which would be prudent for advisers to consider in order to better equate the fee charged with the value of the advice provided.
On the topic of the growing trend for consumers to access financial advice direct from Internet-based services, Mr Sullivan says advisers should be confident that the nature of their face-to-face interaction with clients has much greater value than any online advice a consumer may be able to access through the direct Internet advice services.
Advisers can click here to view the Dan Sullivan interview.
