As we look ahead to the issues that will impact the financial bottom line of advice practices this year, we are asking:
What single issue will have the biggest impact (positive or negative) on the profitability of your advice practice in 2012?
We want to know whether elements of the Future of Financial Advice (FoFA) reforms are at the forefront of your thinking in terms of financial impact on your business, or whether the major concern for your advice practice relates more to Australia’s stagnant economy or to other factors, such as changing licensee fee structures.
The final details for some elements of FoFA are still to be fully revealed, particularly for areas such as opt-in, and it should be remembered that the legislation has yet to be passed by Parliament.
However, it emerged at the end of 2011 that there may be room for advisers and licensees to continue to access volume bonus payments for investment products as well as for risk products, as long as it can be shown that those volume-related payments do not represent conflicted remuneration (see: Door Open for Volume Bonuses to Continue). How important is this to you, compared with other factors that will potentially impact your financial bottom line in 2012?
Let us know what other issues you believe will have a major bearing on your profitability this year…
Hmmmm-dont get your hopes up folks.Any decision by an ADVISER that his/her receipt of volume bonuses does not conflict the advice will be tested by a legalise opinion from the licencee, ASIC and ultimately a court. Do you want to be the test case.
Again, how will licencees handle this? The big corporate licencees have already decided volume bonuses wont be paid to the adviser some months ago.
Could it be that this change is only about RISK commissions, something that has always been a grey area in terms of volume bonuses since the debate began
The real question is what is Shortens political motive in firstly announcing it will be a blanket ban, then belatedly letting in just a tiny bit of ( dodgy ) candlelight
Opt in is not a simple cost analysis to determine the impact on advisers to administer,it is a major body blow to risk advisers who spend many hours taking clients through the copious and complex steps to complete the advise process,which clients will never pay for all the work from their pockets, as they do not understand and are not interested in what is involved and the cost of providing this advise.
Apathy and disinterest in getting a full analysis is a problem we overcome because the client does not directly pay for all this work,so they grudgingly will put up with all our questions and confusing jargon from Insurance Companies, because of our perseverence.
Now imagine how a person will react when they get a notice from the Insurance Company asking for money and in the same notice stating the adviser will be paid X amount of dollars for something they were not that interested in,or even aware of the massive time spent and cost to advisers to establish and handle their policies.
If advisers can reduce their workload in their dealings with Insurance Companies,Dealer groups,regulations,reporting and compliance,eg; provide Insurance cover the way industry Super funds provide it (very little work)then who pays the remuneration would not be such a big issue.
Opt in via commission disclosure from Insurance Companies on top of all the disclosure we already provide, is a quick way to reduce proper risk insurance analysis for clients and for our Industry to become product peddlers flogging the cheapest and quickest policies to put on the books, which defeats the very purpose of being a professional adviser.
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