Consumers will expect advisers to be well regulated but are not interested in how they meet these obligations and will shy away from advice based on effective compliance regimes only.
At the same time planners need to offer a redefined value proposition if the advice sector is to improve its status and grow according to Centrepoint Alliance chief executive, John de Zwart.
According to de Zwart the financial planning sector has become “obsessed with regulation, compliance and our own processes rather than the needs of client”.
He stated that while the Future of Financial Advice (FOFA) changes need to be adopted across the board full compliance with FOFA would not satisfy the advice needs of clients.
“Clients are entitled to simply expect that as an industry we are well regulated, have high professional standards and are acting in their best interests,” de Zwart said.
“But clients don’t just want to be the recipient of a product recommendation and aren’t particularly interested in how advisers comply with their regulatory obligations. What they are interested in is how we can help them realise their dreams by protecting and growing their wealth.”
De Zwart said advisers needed to return their focus back onto clients and away from compliance and provide holistic advice by either automating or using specialist service providers for non-client focussed aspects of their business including administration, compliance and portfolio construction and investment management.
He also stated that if clients saw their planning needs being met they would take ownership of their financial plan and value the advice being provided.
“This makes good business sense because in a fee for service model the only way for advisers to generate more fee revenue and scale up their practice is to service more clients and/or broaden the service they provide them.”
