Take a closer look Mike, there are some bombshells in there. Here is one example....The Code of Conduct requires fees to be 'fair and reasonable and represent value for money for the client'. This is very easy to say and it seems reasonable on the surface. But in practice, this will be a nightmare. What sort of documentation and analysis will be required to meet that test? Do I have to compare my fees to market rates? Must I show there are tangible cost savings or tax reductions for the client which outweigh the fees? What about likely, but uncertain benefits, such as future returns? Where do we stand on intangible benefits such as peace of mind or protection against mistakes which could otherwise be made without advice? What about those with higher balances, who receive a greater benefit, can that be factored in? What about irregular services, such as ad hoc assistance and/or advice during redundancy, marriage breakdown, major asset purchase, transition into retirement, Centrelink, insurance claims etc. which are normally covered as part of a package, when required, via ongoing service fees? Must all fees be linked to hours worked in a specified period? This is a minefield. What one person thinks is good value, may seem like a rip off to another. Look at Rio Tinto's share price right now. The market value is $79.31. But I have one research house saying fair value is $52 and another $85.63. These are major research houses with access to all the same publicly available information and they have dramatically different views. So how the hell can I predict what an auditor from a code monitoring body will percieve as good value when it comes to the fees I charge for my service? No other profession is required to adhere to such an absurd value for money test. This wasn't in the draft, so FASEA have denied us the opportunity to provide feedback. What a complete debacle.This is what Kenneth Hayne said on the matter in the interim report 'The uncertainty of the content of what is promised is not an issue to be solved by regulation. It is, and must be, a matter for client and adviser to decide what if any services will be provided after the provision of initial advice. It is, and must be, a matter for client and adviser to decide how those services are defined' page 132
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