As the financial planning industry gets ready for the introduction of the Government’s Future of Financial Advice (FoFA) reforms, many advisers are concerned about a possible loss of revenue in the shift to fee-for service as well as the impact of the proposed two-year opt-in rule.
On the other side of the fence, however, it appears that clients prefer both fee-for-service and opt-in. A recent study conducted by MSI Global Alliance found that 68 per cent of business owners want financial planners to invoice them based on a fee-for-service remuneration model, while a further two-thirds regard the two-year opt-in proposal as a positive move.
With these changes, it will be vital for financial planners to communicate and demonstrate the value they add for clients. This is not always a natural strength of the financial planning industry. Getting to know your client, understand their needs and provide truly tailored advice will be critical. In times of market volatility, helping clients manage downside risk will be especially important – and this is a great opportunity for financial planners to take a proactive role with clients in truly demonstrating the value they add in good times and bad.
