Alternate revenue models will be critical for the financial planning industry with a ban on commissions under the government’s proposed Future of Financial Advice (FoFA) reforms. FoFA presents planners with the opportunity to seriously reevaluate the value of advice and how this is articulated and communicated to clients in order to bridge the gap between what they are prepared to pay.
Many advisers are actively moving towards a fee-for-advice model. With this shift, however, Craig Donaldson says quantifying and communicating your value proposition is critical in getting clients to pay for advice.
The financial advice industry seriously needs to rethink its approach to charging for advice. Financial planners should look at success-based fees in considering what model they might adopt in a fee-for-service post-FoFA world.
There is scope for significant improvement in the provision of good quality retirement advice in Australia. However, removing conflicts of interest in the financial advice industry is easier said than done.
Creating and communicating value is a cornerstone of your practice value. It is important to understand the value you bring to the table – both for your clients and potential acquirers – to boost the value of your practice.
The financial planning profession faces a number of challenges as a result of FoFA. However, the reforms present financial planners with a number of opportunities to run more efficient, collaborative practices with a strong focus on value.
There is a significant trust gap between those who use the services of financial planners and those who don’t. This is a major issue for the financial planning profession, and potential conflicts of interest are something that must be addressed if the profession is to improve its standing in the eyes of potential clients.
The younger generation is least likely to be happy with the value they get out of financial advice. Advisers could do more to recognise and respond to the concerns of younger investors, and relate to them proactively. However, there are a number of steps advisers can take to improve this process and the perceived value that clients derive from financial advice.
Financial advisers have historically been slow on the uptake when it comes to social media. Wading into the social media waters needs to be done in a way that will add genuine value for your practice.
A good referral system is one of the easiest and cheapest ways of building your financial planning business. We explore the common elements of a good referral system, how to go about selecting clients that will assist with referrals and where advisers often fall down when it comes to referrals.
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