80% of advisers say BID improves advice
Four out of five advisers believe that the Best Interests Duty (BID) has been necessary to raise standards across the industry, with the formal structure of the compliance regime improving their confidence in the quality of their advice.
Research by HUB24 also found that while advisers were generally confident of their understanding of the BID, 70 per cent of those surveyed said that they “definitely” or “may” need further training or information.
Association of Financial Advisers (AFA) chief executive, Phil Kewin, said that this showed that the BID was arguably the most important obligation for advisers. He called for more guidance on it for planners, as “ultimately an increased awareness of the BID … will result in improved outcomes for the consumers of financial advice”.
The research also looked at product selection, with the most significant consideration from planners being whether a product matches the client’s assessed risk tolerance, or whether the product was better or had more relevant features than others. Cost was also a factor.
When it came to platforms specifically, features also outranked cost in leading advisers’ choices. Interestingly, whether a platform could help add value for clients through active tac management of investment portfolios was either “extremely important” or “somewhat important” for 89 per cent of advisers.
The research was based on a survey of over 300 advisers on how they had implemented the BID in their business over the last five years and how it had affected the provision of advice to clients.
AUTHOR
Hannah Wootton
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
