Speaking to ifa, Jim Mills, a director of Merit Planning Hills & Inner West – an authorised representative of Hayes Knight-aligned licensee Merit Wealth – said that the industry should be taking the FDS requirements on board, rather than shying away from the changes.
“I don’t understand why anyone would be scared to justify their fee to a client; the only reason that [advisers] would be is if they can’t justify it,” Mr Mills said.
“That might be the more knee-jerk reaction that the industry has had in regards to this.”
Mr Mills said that his practice has used the changes as a way to reiterate its value proposition to clients.
For advisers who are providing quality advice to their client base and can demonstrate it, Mills said FDS requirements will service to strengthen their business planning.
“If you’re running a practice where you’ve got a stack of clients you haven’t seen for ten years and you’re sending them this ongoing fee that they don’t even know about, then I can understand why [advisers] would be sweating about it,” he said.
“But if you’re providing value for clients, if you’ve got a good relationship with them then of course they’re paying for it.”
Mills said that the FDS requirements might go some way in showing the real value of advice for clients and provide a point of differentiation between them.
“What it might do is identify quality adviser business from the majority or the rest that don’t have that real relationship or existing communication with their client base; we’re massive supporters of it. It’s definitely a step in the right direction we think.”
Well said Wildcat!
Freakin joke, what an absolute JOKE!!
All of this stems from 10% storm financial/westpoint type rougues, 10% political bandwagon vote grabbing clowns & 80% FPA/AFA type efucation providers who have diligently marketed education/courses/membership fees as the be all & end all solution. Well FPA/AFA you have shot yourselves in the foot. No more course or membership fom me & most collegues i know. You created ths fear mongering mess & every adviser should boycott your lazy behinds!!
Congrats on ruining this industry in so many ways.
Knee jerk reaction ?
more like highly skilled propaganda from a bad bad government, full of bad bad people, with bad bad intentions to the private sector to bog us down in useless rubbish so they can prop up their biggest donator the Union Super Funds or Industry Funds whatever uou want to call those funds that advertise everywhere for no fee yet manage to find money to advertise on prime time TV
Sorry, I do not understand. One individual thinks FDS’s are a good thing and this becomes a something to report on?
I for one am not buying it.
Jim, please don’t worry about me or my clients, or the strengh of our relationship or what I charge or the value of what I do (intrinsic or otherwise). Just worry about yourself thanks.
Look, it is pretty obvious that the overwhelming opinion is that the industry is well and truely over regulated. Someone needs to pay for that and that will be the client.
End result – fewer people will seek and obtain financial advice. We all know that is a bad thing – except maybe those drinking Jim Stackpool’s Koolaid!!!
I have 2 FT staff and 1.5 FTE in part time staff plus me, so we are not a big business. However as we run an independently minded (not ASIC’s def’n tho), largely off platform, business red tape is surely asphyxiating us.
As a result of AML, FDS plus all the other rubbish (we are coming up for our 3rd FSG this CALENDAR year) I am now employing one FTE to do the BS work of government and government red tape.
It’s got to stop!
Stop punishing the honest advisers and rip out the ones that shouldn’t be there in the first place!
Ive had lots of people come and see me saying their existing adviser charges a fair bit and they can’t see the value they get…..so they walk. I’ve lost a few over the years too. So, already they are free to change advisers at will if they want to. As mentioned already the fees are already transparent, now if the adviser didn’t live up to the clients expectations they leave. But now we do some other disclosure of fees….but why ? If they leave they’ll only pay fees to someone else or try DIY and potentially lose money than if they stayed where they were.
Wasn’t this FDS some late inclusion to FoFA without consultation, thrown in by the ISN? …if so, there’s your answer and for anyone to suggest its a good thing…..that just amazes me.
I agree that it is important to demonstrate value to our clients. However this should be embedded in everything we do rather than in a cosly administration process that will either cost your business, or your clients in the long run. It would be an interesting exersise to have an extra line in the FDS that discloses the additional cost to the client to administer and prepare the FDS?
I believe Jim Mills comments are “right on the money”. I have a regional financial planning service where we must always be honest and believe in the fees we charge are real and fair-dinkum. I have been in the Industry for 27 years and have seen the easy money that has been “levied” from Clients for a wide variety of “legitimate” reasons.
I’m afraid that I could put the majority of Accountants and Solicitors in the same mode of “self belief” in their worth to their Clients.
Jim, keep flying the flag for your morals, honesty, best intersts of your Clients, because if you embelish all those attributes, you will not keep up the referrals that will keep knocking at your door. What a pain in the back-side problem to have!!
I actually think they just want to crush the independents so all breaches can be covered by big cheque books, like the CBA for all of their current problems with a shonky adviser.
It’s not about consumer best interest and what fees are charged by the into’s they could not care less. That and looking after their industry fund mates.
Give me a time machine to the 14th September please!
Government has said they want people to save for their own retirement and want us to use Advisers.
The more crap government heaps onto advisers then investors are less likely to use Advisers,and less likely to save.
The Government is thus perpetuating their self defeating decision making and their own eventual demise.COME ON SEP/14th
More compliance rubbish that help no one in the end but dealer groups & fpa type bodies. What these constant changes (and it will never end) are doing is saying our industry is worthless and full of rouges. Thatbis clearly not the case. I like many advisers have never & will never have an issue. Stop destroying my life, business & time with these USELESS compliance issues & go aftervthe rougues you are trying to catch. Its pretty simple & easy to identify them if these compliance people had any experience in the real world. Stop this nonsense, get off your lazy box ticking behinds & work with this industry for a change & not against it!! Where is the FPA? Where is the AFA? Someone standup & breathe some common sense into this world! Oh look a plastic bag, i wonder if its a toy? I think ill put it over my head…..
So you found one adviser that likes these documents, and it’s a story! What about the vast majority who have better things to do than produce documents which provide clients with information they have already received in an FSG, an SOA and every year on their annual statements. It is a ridiculous waste of time that will reduce productivity and increase the cost of financial advice.
The issues raised here are not what the industry is concerned with. The challengers that arise come from being able to access data from all the product providers, funnel the various areas of fees through for each client to the one spot as well as capturing all the service data for each client in the same spot so you can hit the button to generate the FDS which doesn’t even provide the client with a clear picture of what they paid and won’t reconcile with any other document they receive such as SOA or product statement. In addition if you get the date wrong or the brokerage payment and notices don’t all come through on time from the various product providers you may miss the date or the data may not be accurate and then you are subject to significant breach reporting and civil penalties. Demonstrating the services and fees the client pays are not the issue it’s the ridiculous legal requirements to administer the FDS which are problematic.
Agreed Gerry. The cost of this to an existing business is huge to implement and then manage. The result, our FDS’s will have to have higher fees for the compliance costs.
This is just another example of the present government driving small business into the dust with red tape and bureaucratic BS.
And another example of making good and professional financial planning too expensive for the regular Joe and Jill.
I guess an industry fund is the answer with their “scaled advice” telephone centre based overseas?
Of course if I was an institutionally owned planner with 100% in insto product on high fees, the FDS’s are a breeze. If I try to be independently minded and look after the clients best interests, our compliance costs explode.
It has nothing to with justifying the fee, I’m very comfortable with that.
If you are doing the right thing by your clients you are already clearly disclosing and discussing fees with them. The FDS is therefore just unneccessary additional red tape and compliance, and an additional cost to your business that will eventually be passed on to clients.
If you are not doing the right thing then the FDS is a step in the right direction.
I disagree…..the FDS is provided to clients who already have transparent fee disclosure at least yearly. If they can’t see the value by now they would have walked. This is extra administration only, a costly and unproductive burden.
But by all means, go ahead and issue more paperwork to your clients. I’m sure they will appreciate knowing the extra time you spent on implementing red tape for no benefit to them other than possibly raising their fees.