The vast majority of advisers do not believe that the Future of Financial Advice (FoFA) reforms will improve the quality of financial advice or improve the reputation of the profession, a new survey has found.
The poll of over 300 advisers was conducted by software provider Midwinter, and asked respondents to indicate whether they believed the FoFA reforms would deliver on their objectives. 51% of advisers surveyed said the reforms would have no effect on the quality of their financial advice, and a further 30% said FoFA would have a negative impact on the advice they delivered.
Similarly, when asked what impact FoFA was likely to have on the reputation of financial planners, 43% said the reforms would have no impact, and 27% believed the perception of the profession was going to be negatively impacted.
Doubts about the effectiveness of the reforms may also have led to a certain amount of ‘soul searching’ amongst advisers, with more than half of the survey respondents saying that the implementation of the FoFA reforms had made them question their future within the industry.
“Broadly speaking, the objectives of FoFA are to raise the standard of financial advice and to decrease the cost of providing that advice,” explained Midwinter Managing Director, Julian Plummer.
“The results of this industry survey clearly indicate that the majority of advisers strongly believe that FoFA will not achieve those broad objectives.”
The Midwinter FoFA Industry Survey was undertaken to support the release of the group’s new financial planning software offer, called AdviceOS (see: New Advice Software Promises Simple FoFA Compliance).
FoFA will do absolutely NOTHING to stop another Storm or Westpoint. Once again the regulators proving they know nothing about our industry. Conflict of interest and an annual FDA is product focussed, ‘best interest’ is product focussed. You could give a really inappropriate strategy to a client and meet the best interest duty and still be compliant under FoFA.
My thoughts exactly Jason. Plus it’s going to DECREASE the cost to the client? Not likely, quite the opposite in fact.
It will also create a situation where advisers cannot afford to take on smaller clients who actually need strategic advice and assistance because the client cannot afford to pay for their services!
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