Most planners still not FOFA-ready
An Investment Trends survey conducted two months before the Future of Financial Advice (FOFA) reforms came into effect has revealed only 23 per cent of financial planners felt ready.
This is consistent with the Financial Planning Association’s June straw poll, which found only four out of 100 financial advisers present at the association’s breakfast function were ready for the new legislation.
The Investment Trends Planner Business Model Report, which was based on a survey of more than 1100 advisers, found a boost in planner confidence, yet 95 per cent still saw challenges posed by FOFA.
“There is still a great opportunity to help planners, with 70 per cent saying they would like their dealer group to help them with implementing FOFA changes,” said Investment Trends senior analyst Recep Peker.
“Fee disclosure statement and other templates are at the top of their list, but they’re also calling for more education and further enhancements to their systems.”
Almost half of planners were struggling with the administrative burden posed by the annual fee disclosure statement (FDS).
In fact, the FDS requirement has replaced opt-in as the number one concern among planners, with the proportion citing this as a challenge jumping from 12 per cent last year to 48 per cent.
The financial planning industry could be finding comfort in the Australian Securities and Investments Commission’s reassurance that it would take a facilitative approach in the first 12 months of FOFA.
On the other hand, planners seem to be generally happier with their dealer groups, as advocacy reached its highest levels in four years. However, Peker said these results varied markedly between different dealer groups.
“There are clear drivers of success here, and what we find is that it comes down to planners’ views on the level of support, flexibility and proactivity provided.”
Securitor had the highest level of advocacy from its planners, with those who are most happy with it often citing the group’s excellent support and compliance services, proactivity in tackling FOFA-related issues and emphasis on keeping planners informed.
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