The Association of Financial Advisers (AFA) has expressed surprise and concern that product providers rather than advisers are initiating the client authorisation process for ongoing adviser fees.
AFA policy director, Phil Anderson has notified members of the practice, stating that the product providers are writing to clients asking them to provide confirmation of agreement to pay their adviser ongoing fees in the 2019/20 year.
“If the client does not respond before 30 June 2019 then the fees will be turned off,” he wrote in a message to members.
Anderson said this process was on top of the adviser’s client renewal process and in advance of any law being passed that might require such action to be taken.
“This is part of the Royal Commission Recommendation 2.1 on Annual Renewal and Payment,” he said. “We had assumed that this exercise would have been undertaken by the financial adviser on behalf of the product provider, however in this case it is a totally separate process.”
“We are hearing more and more stories of product providers moving on different Royal Commission recommendations in advance of any legislation,” Anderson wrote.
“Advisers need to be aware of any of these developments and ensure that their clients both know what is required and respond to what the product provider requires”.
The AFA is seeking member feedback on any other instances of product providers acting unilaterally.
Comments
This is happening right now.
The product providers under the guise of Trustee responsibility are proactively contacting adviser's clients and seeking to influence the client into thinking the product they may already be in may not be the most suitable product and to consider instigating a change !
It needs to be clarified that several major product providers have already been doing this recently and openly state
" you may also wish to explore alternative products that WE offer".
One large provider states in a letter to adviser's clients in reference to the recommendations from the Royal Commission that " it is expected to be made law soon " and that " The Trustee also supports the INTENT of the recommendation"......
This provider has written to adviser's clients requesting the client complete a Confirmation of Ongoing Advice Fee form
approving advice fees to be paid for the coming financial year ( ie Opt In Notice) FROM THE PRODUCT PROVIDER !!
So the law regarding grandfathered commission payments has not yet been changed, it is the adviser's responsibility to issue FDS and Opt In Notices and now we have product providers acting on an EXPECTATION and INTENT in relation to potential law changes and taking matters into their own hands.
This particular provider states " It is now a requirement of the Trustee to have your written authority to pay these fees to your adviser".
The product provider would already have the original authority from the client to pay the ongoing fee.
Isn't it a requirement for the ADVISER to have receipt of the completed Opt In Notice from a client to continue receiving the fee payment???
It is blatantly obvious that many of the large product providers who are not delivering any advice service at all and are merely the product manufacturer and administrator are taking on the requirements of the adviser and manipulating the client.
Which providers? Can someone name names? I will have a very long memory about this...
Finally. I wont have to spend hours each month completing FDS and opt in forms.
The left wing extremists who have taken over ASIC and APRA are intent on killing us off from every angle. Smelly Kell publicaly stated that If clients are happy to sign our opt in and fee agreements and less complaints have been coming in about this, then clearly a problem exists! Let that sink in about the mentality and culture at that corrupt inept organisation.
Clearly, even if clients are happy and sign our forms, ASIC and APRA want to scare product providers into cutting our payments in case they get penalised. Remember planners and product groups now have the burden of proof thrust upon them to show innocence, rather than our legal system which puts the burden of proof on the prosecutor.
While Labor and unions have their greedy fingers in the superannuation pie, and have placed their moles in organisation like ASIC (what other way could you describe Kell ?) and control the dialogue and agenda via sycophants like Haynes, this attrition will not stop.
The blatant commercial reality is that they are fighting for our death to better control a revenue stream that is literally worth hundreds of millions of dollars to them as a group, and to the personal wealth of the key players in their cronyism.
They will not stop and unfortunately the FPA and AFA have been too caught up in political correctness rather than political reality. For the product providers it is easier to roll over, and as a number of comments here indicate, a number also are looking at how to profit further from eliminating us.
If your clients don't have massively positive cashflow or you do not have a large percentage of clients in retirement phase so that direct invoicing versus trail fees becomes a moot point, then in this current version of reality, your demise is just a matter of time.
I am not aiming to be trite or offensive, but highlighting the very real threat that this current agenda being firmly pushed by the left actually means for most planners in business today.
Stopped reading after "Smelly Kelly". Go back to Facebook trolling...
You should have kept reading - Right Wing Team is correct.
OK he didn’t need to name call but to ignore the point is your loss. In fact it is more than just the revenue stream they are after, it is the control of the exponential growth of trillions that will be under their trust and the manipulation on the economy that is allowed by that control. Then there is also the replication of the banking system that this control and access to such funds allows which then flows into the control of capital creation and money printing. You only have to look at the coordinated attack on mortgage brokers via advocacy groups and the RC. The attack on mortgage brokers is actually an attack on smaller lenders and new fintechs to clear them out of the way for ISN to fill any gaps created. A lot has been said about how successful the recent mortgage brokers campaign has been to gain some ground back - the reality is the push back only gained traction when the smaller lenders got involved behind the scenes. ISN and friends are making their Fabian strike now as it is their best opportunity before the tech giants come in with AI and the likes of Vanguard come in with a next to zero fee Super account.
I agree. There are some providers , under the guise of the Royal Commission, taking the opportunity to encourage clients away from their current adviser and back into an orphan pool they can market to. For self employed planners it's just another hurdle in our hurdle marathon at the moment.For employed planners its happy days with more potential orphan clients being marketed to for them to see.
Some names would be good. My experience is that only a small portion of individuals will return forms regardless of the relationship...People are lazy... A classic is example is that Super funds stopped writing to their members in regards to their binding death nominations. Non Lapsing nomination were invented because people simply don't return forms. This was clearly stated by super funds. Any correspondence will sit on the Kitchen table or the inbox, Easter will come up, kids will scream, dog will bark and your response rate is going to be 20% at best.
Which providers are doing this? Please name them!
At the moment platforms compete on the basis of functionality, price, investment range, and service. But moving forward platforms will also be assessed on their advice fee collection policies. Those platforms that implement draconian measures well in excess of legal requirements, will be abandoned by clients and advisers.
If any advisers think that the large product providers and platforms are not making a play for your clients loyalty right now, then think again. They well and truly believe the clients are shared between the 2 parties and they are making very obvious moves to directly market to them on a regular basis to ensure the client sees their brand many more times than they may see your own.
They are suggesting to clients to contact them directly to request a rebate of commissions and fees, cancel insurance they may not need and to consider their more contemporary product range.
This is all about the client associating first with the platform and second with the adviser and eventually it is a play to eliminate the adviser and have a direct client relationship and increase profit .
It is obvious, it is devious and it is manipulative.....and it's about winning the client's loyalty and controlling the game.
For these superannuation platforms, the reason being used is Trustee responsibility to act in the best interest of their members. This means they could do almost anything if they could justify a potential member benefit as a result.
This is like Coles and Woolworths and the corner store...look out and be vigilant because they want your client to be their client.
Silence from the FPA..... Being attacked on every front now. I don't know why, especially after I just had someone crying in my office as their adviser left them and after shopping around I am the third adviser they've seen who told them they are below the minimum fee. They mentioned things about a chat, peace of mind, it was all about the relationship.
BT and Colonial First State are doing it right now. Our clients have already shown us the letters.
I have seen the CFS letter, and at least they had the decency to publish that it was going to happen. BT is news to me though, I haven't been able to locate it on my adviserwrap/Pano desktop. I'll be contacting my BDM to find out what's happening though.
Which CFS product? I haven't seen any letters going out to my FirstChoice clients.
This is definitely happening right now - a couple of clients have shown us the correspondence from AMP and I'm willing to bet that it's very similar to the BT and CFS letters. Collusion comes to mind......
These product providers are contacting clients who may be paying the adviser grandfathered trail commissions and are directly seeking to influence the client based on the expectation the law may change and on the intent of the proposed law.
They are effectively stating to clients that they support the proposed change in law surrounding grandfathered commission payments and support community expectation!
But what they are really doing is subliminally coercing the client to act and framing the reason around the clients best interest. By framing the argument on this basis, it automatically causes the client doubt, concern or confusion that their current product may not be in their best interest and so encourages the client to contact the provider and potentially bypass the adviser.
What the product provider does not know is actually what is in fact in the clients best interest because they don't know the client or their circumstances....they have never met with them, never assessed their position and never provided any advice.
If the product providers are coercing or influencing the client to rebate commissions or turn off grandfathered trail payments prior to legislation requiring this to occur, then they are complicit in encouraging the client to alter their position and to withhold remuneration payments that advisers still have a legal right to receive.
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