If implementing the Future of Financial Advice (FoFA) reforms cost the industry $3 billion, what will be the ultimate cost of implementing the Financial Adviser Standards and Ethics Authority (FASEA) regime?
That is a question being posed by InFocus managing director, Darren Steinhardt who said that while much attention had been directed to the additional costs being carried by financial advisers, the additional costs to licensees should not be overlooked.
He said that during the FoFA implementation and effort had been made to keep track of the implementation costs across the industry, but this was not the case with respect to FASEA.
“…it is strangely quiet when it comes to calculating the cost of the FASEA implementation,” Steinhardt said.
“The end cost of FoFA implementation was massive, (approximately $3 billion based on research undertaken by the Financial Services Council at the time) and ultimately these costs were absorbed by advisers and by clients. It is somewhat unnerving that all is silent on the cost of FASEA and how this might impact clients and the affordability of quality advice.”
“This lack of consideration of the cost is symptomatic of all changes that are being imposed on advisers (and ultimately their clients) at the moment,” he said. “There is no such thing as a Regulatory Impact Statement or in fact any visible thought being given to costs, which ultimately are passed on to clients.”
Steinhardt suggested it was time to slow down and consider the real cost of FASEA implementation.
“Ironically, the future for good advice businesses has never been greater because ultimately (and sadly) there will be less advisers and higher barriers to entry,” he said.