More needs to be done to lower financial advice fees

The rise of scaled advice and fee for service models ahead of the start of the Future of Financial Advice legislation has made the need to lower advice costs even more important, according to Provisio Technologies director Cameron O'Sullivan.

A recent report by Investment Trends found that a financial planner is now charging an average of $2,350 for the cost of comprehensive advice for a typical client, compared to $2,600 in 2010.

Investment Trends senior analyst Recep Peker said part of the reason for the reduction in cost was due to enhancements in planning software and platforms.

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"Advisers are starting to use technology wisely to trim the cost of providing advice, and that is a good thing," O'Sullivan said.

"But in the vast majority of cases there is still more that can and should be done, particularly to be ready for a forecast increase in scale advice and fee for service," he said.

O'Sullivan said the proper automation of statements of advice (SOAs) could save planners time and money and allow them to focus more on the investment strategy without losing any of the quality of the advice.

"The extra time to complete the SOA is not adding any value to the client," he said.

"The value for the client is in the strategy, not the processing, which is laborious in many cases," O'Sullivan said.

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