FDS presents client retention challenge

fee-for-service/FOFA/financial-planners/advisers/

17 April 2013
| By Milana Pokrajac |
image
image image
expand image

Many financial planners might struggle to articulate their value to passive clients come fee disclosure statement (FDS) time, according to Elixir Consulting managing director, Sue Viskovic.

Once advisers get their head around the technicalities of the FDS requirement, Viskovic said the challenge would be around making sure the clients receive the information well, particularly if there had been no regular engagement.

Elixir will provide training to advisers around this issue, but Viskovic said not all advisers would struggle.

"The clients who are already engaged with an adviser are not an issue, because advisers deliver their FDS in person when they come in for their review," she said.

"The actual document might be a bit different, but the conversation will be similar to what the client is used to."

Other clients, however, might not be used to a re-focus on fees.

"The biggest issue would probably be clients who do pay fees, but don't actually participate and come in on a regular basis for their review," Viskovic said.

When the industry started to weed out commissions, many planners started charging asset-based fees - or a commission/fee combination - but many planners failed to let their clients know about the change in pricing and the ongoing services provided, Viskovic found.

"This is where the practical reality comes in," she said. "If you have to send out that compliance document that says ‘hello, you haven't heard from me in a while but by the way I'm earning all this money from you" then obviously that could mean that clients might not receive that information well."

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

4 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months ago

Commonwealth Bank has formally dropped to zero advisers following LGT Crestone’s acquisition of its advice arm – some six years on from the Hayne royal commission. ...

3 weeks 4 days ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 1 day ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

2 weeks 4 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
3