Futuro links compliance standards to dealer services costs
Non-aligned planning group Futuro Financial Services has increased its dealer services fees but will provide rebates to planners who implement changes that reduce business and compliance risk in their practice according to managing director, Dennis Bashford.
Bashford said the dealer fee, which is levied at a flat rate, has been increased by a few per cent but will be rebated to planners within the group who gain a satisfactory audit rating, who adopt the model portfolios used by the group and who use Xplan software and are members of a professional association.
He said these measures, among others, were designed to make Futuro advisers more compliant, integrated and efficient with each measure resulting in a rebate of part of the dealer services fee.
He said the change in dealer service fees was to encourage proper behaviour and while advisers in the Futuro group recognise the changes in the industry and those required by them to compete they had yet to gain traction at the practice level.
"We wanted to create an environment in which planners had to change their behaviour because we are concerned about the level of risk and the impact of penalties under the Future of Financial Advice (FOFA) reforms," Bashford said.
Bashford said Futuro has to date only had a handful of compliance and professional indemnity (PI) insurance problems and in matters taken to the Financial Ombudsman Service, "it was not that they had done the wrong thing but they could not prove they had done the right thing".
"We want to have a greater emphasis on those areas which reduce risk and avoid issues with clients and our planners have not always applied themselves to this. I suspect we are not much different than many other dealers in this regard."
"Planners who are doing the right thing have been subsidising those planners who are not when it comes to PI costs and the PI insurers are very interested in what we are doing. We have found they act very favourably towards planners with a clear compliance record otherwise they make assumptions about the planner that is not always in their favour."
AUTHOR
Jason Spits
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
