The Future of Financial Advice (FoFA) reforms are already having an impact on the financial planning industry. With draft legislation yet to be seen, research has found that some financial advisers are taking a proactive approach to changing how they do business.
Recent Investment Trends research found that as the financial planning industry prepares for a move to fee-for-service, some planners are looking to reduce their reliance on outsourcing investment services through fund managers. It found that 40 per cent of planners believe direct shares allow them to differentiate their client value proposition, while 18 per cent use separately managed accounts (SMAs). Almost two-thirds of planners were interesting in knowing more about SMAs as a way of reducing administration while offering improved investment expertise for clients.
With a shift away from commissions under FoFA’s proposed fee-for-service changes, financial planners will need to demonstrate the value they add to clients more than ever. The above research highlights this fact as well as the need for planners to look at innovative ways of maximising cost efficiencies within their businesses.
