Fee disclosure statements – a marketing opportunity?

When it comes to fee disclosure statements, advisers need to consider what the regulator wants; what is expected from a legal viewpoint; and how disengaged clients are likely to react to the letter.

According to IRESS senior business development executive Michael Kinens, his company's XPLAN software can cater for whatever direction planners choose to take.

"I can make it look like anything you want me to make it look like," said Kinens.

On the one hand, the legal consensus tends to favour a 'short and sweet' approach to fee disclosure statements, he said.

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"It says you should almost go down the path of making it three lines: 'I promised to give you an annual review, I did give you an annual review and it cost you $5000'," said Kinens.

But some planners are looking to treat the compulsory fee disclosure statements as an opportunity to market themselves to disengaged clients, he said.

"The legal opinion is great, but there are commercial realities that need to be wrapped around all of this," said Kinens.

"I think there's a tail of advisers - and it's probably reasonably large - who need to establish how they're going to position this statement with clients [they don't have an ongoing relationship with]," he said.

For those advisers, the annual fee disclosure statement could present an opportunity to restate their value proposition, Kinens said.

The problem for advisers is that the Australian Securities and Investments Commission (ASIC) has not produced a template for advisers when it comes to fee disclosure statements - and nor is it likely to, Kinens said.

"When did ASIC ever produce a template for a Statement of Advice or anything along those lines?" he asked.

"Advisers have always been coming from behind in regards to knowing what they're meant to do," Kinens said.