The ongoing ‘fee for service’ debate is actively impacting financial planners, with research into financial planning dealer groups suggesting advisers are receiving more client questions about fees and charges.
A recent study of over 1,300 financial planners conducted by research house brandmanagement asked questions of large banking and insurance planning groups along with independent dealer groups.
When asked whether clients were pos_ing more queries to advisers about fees and charges, over 40 per cent of those sur_veyed answered in the affirmative, either agreeing or strongly agreeing they were getting more enquiries.
Following on from this, an overwhelm_ing 77 per cent of respondents felt financial planners had been given an “unfair wrap” by the Australian media, 49.6 per cent agree_ing and 27.5 per cent strongly agreeing.
On the question of whether planners felt their industry associations were doing an adequate job in defending their con_stituencies, adviser sentiment was more measured, with 44 per cent either dis_agreeing or strongly disagreeing, 27 per cent either agreeing or strongly agreeing and almost 29 per cent neither agreeing nor disagreeing.
According to brandmanagement’s head of market intelligence Craig Phillips, people continue to be attracted to the big brands.
“It’s interesting that those who are ask_ing questions tend to be clients of the larg_er groups,” he said. “At least that’s what the planners are reflecting, which again comes back to previous research which showed clients tend to go to the big brands because of brand recognition.”
Commenting on the survey findings, Andrew Creaser, executive director of Challenger-owned financial planning deal_er group Genesys Wealth Advisers, said: “It’s always a ten_sion between dealer groups and advisers: fees versus services, the value proposition and so on.
“As with any supply demand equation where supply is constrained [you] inevitably get into a price debate. I don’t think there’s a lot new in the results É other than it’s pretty competitive at the moment.
“Dealer groups need to ensure É clients get the right advice and the right recom_mendations and outcomes, but the broader you make your offering in terms of access to products and platforms, the more costs you incur as a dealer group to ensure that you’ve done adequate levels of research and due diligence É so inevitably the client ends up paying more for broad choice.”
Creaser also spoke about the treatment the financial planning industry has received from the media in the last 12 to 18 months, particularly around the high-profile collapses of Westpoint and Fincorp, believing it has raised awareness of the risks in certain invest_ment types and also highlights why a robust research process is critical.
