Half out of touch with their planner
New research has revealed the magnitude of the task confronting financial planners if the Government proceeds with a two-year opt-in arrangement under its Future of Financial Advice (FOFA) changes, with nearly half of those people who have used a financial planner failing to remain in contact.
The research, undertaken by Roy Morgan Research, found that of those people who had used a financial planner only 52.4 per cent were in contact at least on a yearly basis, and noted “this suggests that the remainder are not in an active relationship with their adviser”.
However, the same research did confirm that people who used an adviser were generally happy with the outcome.
The Roy Morgan research, which also pointed to continuing confusion around the branding of the ‘big six’ planning groups and the question of independence, also suggested that commissions-based remuneration remained a major factor in the financial planning industry.
It said the most popular method of payment for financial advice was via ongoing commission, or as a percentage of investments, with 42.3 per cent of respondent who used financial advice reporting this method.
The Roy Morgan report said the next most popular method was pay per visit, with 39.6 per cent.
It noted that this figure was “not surprising given that the major licensee groups have already transitioned across to fee-for-service arrangements for clients since 1 July 2010”.
The Roy Morgan research was mainly based around superannuation, and noted that Australians who acquired their superannuation through financial planners were confused as to whether the planner they had used was aligned to a major financial institution or an independent dealer group.
“This is especially prevalent for the licensee groups owned by the ‘big six’ retail groups such as Garvan (NAB/MLC), Hillross (AMP), RetireInvest (ANZ) and Charter FP (AXA),” it said.
AUTHOR
Mike Taylor
Recommended for you
Financial Services Minister, Stephen Jones, has assured the cost and time to enter the financial advice profession will soon be halved, as shadow treasurer Angus Taylor pledges to reach 30,000 advisers.
The positive results of the latest financial adviser exam have helped the advice profession reach 15,600 yet again, according to Wealth Data analysis.
Financial advice firms have told Adviser Ratings they are planning to increase their compliance spend by almost a third, including on enhancements to their cyber security which ASIC has identified as an enforcement priority.
The digital advice platform is officially launching into the financial advice sector, offering up its services to practices as a means of engaging with the next generation of clients.
