Planner sentiment heading down
Sentiment among Australian financial advisers appeared to be heading down even before last week’s Government announcement about the Future of Financial Advice (FOFA) changes.
According to the latest survey data released by Wealth Insights, adviser sentiment took a significant downward turn in April driven by a combination of factors, including the Japanese tsunami and subsequent nuclear accident.
However, Wealth Insights managing director Vanessa McMahon (pictured) pointed to the manner in which adviser sentiment had declined when the Government first canvassed the FOFA changes on the back of the findings of the Parliamentary Joint Committee into financial planning in late April and early May last year.
“There was a significant negative impact on sentiment then, and I think we can expect a similarly significant impact in response to these latest proposals,” she said.
McMahon said focus group work attached to her company’s adviser sentiment survey suggested the proposed two-year opt-in arrangements would have a significant impact on many well-established planning practices which, while having moved to fee-for-service, had been heavily reliant on commissions.
“The practices that I think will feel it most are those with long client lists on which there are plenty of orphans,” she said. “From what they are saying, they will face real challenges in dealing with an opt-in.”
McMahon said that while the first iteration of the FOFA proposals had driven down sentiment through the middle of last year, the actual state of the markets had been a greater influence through the closing months of 2010 and early months of this year.
“As the markets rose, so did adviser sentiment,” she said. “Equally, the Japanese natural disaster, plus uncertainty in the Middle East and North Africa and the continuing European debt crisis have played their part in driving down sentiment in March and April.”
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Mike Taylor
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