HUB24 responds to FOFA with service restructure
Platform provider HUB24 has restructured its investment service in response to the Government’s proposed Future of Financial Advice (FOFA) reforms, becoming another player in the market to introduce changes following the announcement of the reforms package.
Under the new changes, HUB24 will operate under an investor-directed portfolio service (IDPS) model, after initially operating as a full managed discretionary account (MDA) service.
According to the Australian Securities and Investments Commission (ASIC), an important feature of an IDPS model is that the investor makes all the investment decisions, while MDA services involve a person managing a portfolio of assets for a retail client on an individual basis.
“Initially operating as a full MDA service, we now view this operating structure as carrying higher regulatory risk, with less consumer protection than that envisaged by ASIC,” said HUB24 chief executive officer, Darren Pettiona.
Pettiona added the platform, owned by Investorfirst, was also well positioned for scaled-advice and other FOFA proposals such as the removal of conflicted fee structures and the improvement of fee transparency.
Furthermore, HUB24 added Spectrum Wealth Advisors and Premium Accounting Group to its list of dealer groups, with bigger names to be announced soon, according to Pettiona.
This announcement comes weeks after one of the larger players in the platform market, Macquarie Wrap, announced it responded to the changing environment with a launch of a new range of financial products.
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