More concern on FOFA driving up advice costs
Further research has emerged confirming a growing belief in the financial planning industry that the Government’s Future of Financial Advice initiatives will drive up the cost of advice.
The confirmation is contained in an Australian investment industry survey report commissioned by RBC Dexia Investor Services, which said that while the expanded availability of low-cost simple advice had been recommended in the FOFA changes, respondents had been sceptical about what would actually happen.
It said that while 40 per cent of respondents believed advice fees would decrease, others thought they were likely to increase or actually stay the same.
The research analysis said the respondents had been similarly divided on whether the reforms would boost competition, although a significant minority (44 per cent) felt they would.
“The changes ahead look likely to spark some market concentration, with low cost options predicted to place pressure on provider margins,” the analysis said.
It said that over half of the respondents believed the FOFA changes would lead to greater market concentration.
AUTHOR
Mike Taylor
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