Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

Financial advisers in dark on advice provision cost

financial-planning/FOFA/financial-advisers/investment-trends/dealer-groups/financial-planners/director/

26 April 2012
| By Staff |
image
image image
expand image

As the industry moves towards a fee-for-service model, financial advisers need to better understand their service costs per client and adopt scaled advice solutions to service lower-end customers, according to Provisio Technologies director Cameron O'Sullivan.

O'Sullivan said retaining C and D clients would continue to be a challenge for advisers unless the cost of advice could be lowered.

"Cost of advice is becoming more important as planners and dealer groups consider new models for remaining profitable in a fee-for-service era," O'Sullivan said.

Investment Trends 2011 Planner Business Model report found that 54 per cent of the 1396 financial planners surveyed said the biggest challenge they faced under the Future of Financial Advice legislation was providing advice affordable to lower-balance clients.

O'Sullivan said most planning practices had likely supported their lower-balance clients with their higher-balance individuals and "would become only marginally profitable" if they suddenly lost those clients.

He added that it was crucial for practices to adopt better solutions to service low- to -mid value clients, most of whom prefer receiving basic advice rather than traditional high-cost and time-consuming statements of advice.

"Advisers who embrace newer scaled advice solutions will be able to generate these basic plans in as little as a few minutes, dramatically lowering the cost of advice," O'Sullivan said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

6 days 10 hours ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

1 month ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month 1 week ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

1 week 2 days ago

The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted. ...

2 weeks 2 days ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

2 weeks 4 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND