FOFA increases compliance burden

wealth-management/FOFA/australian-financial-services/financial-advice/remuneration/

23 July 2014
| By Malavika |
image
image image
expand image

The compliance work involved in running an Australian Financial Services License (AFSL) has intensified under the Future of Financial Advice (FOFA) reforms, a head of wealth management believes.

General manager of finance and wealth management at Ausingroup Mark Morcos said FOFA has missed its goal of making advice more affordable.

He added calculating how much one needs to allocate towards compliance in a smaller practice has become harder, and the resource requirements have increased.

"What it's done is push the cost of advice up, especially from a smaller practice point of view, and that has to be reflected in what we charge the client," he said.

"That ultimately means the client that needs the advice won't be able to afford it."

As for conflicted remuneration, Morcos believes it should not make a difference to practices that were running their licenses properly.

"If you were running a practice properly even before FOFA came in, you would've basically told your client and disclosed any conflicted remuneration.

"If they were running a best practice model they would have a conflict of interest register and so on, and disclosed anything that they would be earning to clients even before FOFA."

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 1 week ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 5 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks 1 day ago

ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay....

2 days 21 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5