Clients OK about financial planning opt-in
Financial planners might not like the proposed two-year 'opt-in' rule or so-called 'dollar fee' invoicing, but that is what most clients really want, according to a study conducted by MSI Global Alliance.
The MSI Global Alliance - which markets itself as one of the world's leading international alliances of independent legal and accounting firms - has published the findings of a survey of 570 business owners which it says confirms pressure from clients for financial planners to move to charging time-based fees.
And while the survey outcome clearly contains some negative results, it also noted that planners were "the most trusted source of retirement planning advice".
On the fee for service question, the survey found that 68 per cent of participants want financial planners to charge a 'dollar fee' via a tax invoice for the number of hours work on their investment, with 22 per cent happy to be charged a percentage of funds under management.
Dealing with the two-year opt-in, the survey found that 66 per cent of respondents regarded it as a positive move, with just 14 per cent saying it was a backward step.
It suggested that while respondents agreed opt-in would impose higher costs on planners, nearly half believed the costs would not be significant.
Commenting on the survey results, MSI Global Alliance spokesman, Charles Hornor, said it had confirmed two things - that financial planners were the most trusted source of investment advice and that there was concern over what fee for service should really mean in practice.
"Clients are looking for value for money more than ever before, and they are saying that a dollar fee based on the time actually spent on their financial affairs is preferable to being charged a percentage of funds under management," he said.
AUTHOR
Mike Taylor
Recommended for you
Far too few wealth managers are capitalising on the opportunity presented by disruptive technology to deliver personalised investment solutions to the mass affluent demographic, according to PwC.
With over half of advisers using managed accounts, HUB24’s head of managed portfolios has unpacked the benefits driving their usage and how they can be leveraged by advice practices.
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
ASX-listed platforms HUB24, Netwealth, and Praemium have used their AGMs to detail how they are using artificial intelligence to improve their processes and the innovative opportunities it presents.
