Association of Financial Advisers says fee-for-service won't guarantee better advice

financial advisers commissions fee-for-service association of financial advisers financial adviser chief executive

10 June 2009
| By Benjamin Levy |
image
image
expand image

The Association of Financial Adviser’s chief executive, Richard Klipin, has warned that shifting to a fee-for-service model will not guarantee consumers receive higher quality financial advice or that financial advisers will create better business models.

Klipin said the industry still had to define the difference between fee-for-service and commission models in the interest of transparency. Fee-for-service was determined by a range of factors and the consumer had a right to know what was included in the fee and sign off on it, Klipin said.

“[Fee-for-service] considers things like margins for overheads, profits and so on. Understanding these metrics is the cornerstone of all profitable and productive businesses,” Klipin said.

“If we accept that a ‘fee’ can be directed by a client but we allow that fee to be paid by a product provider, isn’t it still a commission, no matter what you call it? And as a result, isn’t this kind of ‘fee’ still open to the same conflicts of interest as commissions?" Klipin added.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 weeks 6 days ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

1 week 4 days ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

1 week ago

Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equi...

6 days 14 hours ago