Licensees looking to simplified FDS regime
With or without the final recommendations of the Quality of Advice Review (QAR) financial planning licensees have been working on simplifying the fee disclosure arrangements, including pursuing an industry standard digital approach.
In circumstances where one of the most consistent issues raised in initial submissions to the QAR, licensees have revealed that they have been working on viable changes, including standardising all annual consents.
Infocus Wealth Management managing director, Darren Steinhardt revealed the push during Financial Newswire’s recent QAR roundtable and said that simplification was important in circumstances where “the client experience is currently awful”.
He said that the current arrangements were complex and confusing which simply did not work to the benefit of either clients or advisers.
“What we’d like to see is one document,” Steinhardt said.
His views align with that of other major licensees who have argued for the removal of the requirement for financial advisers to provide Fee Disclosure Statements on the basis that it effectively duplicates annual fee consent and superannuation trustee consents.
On this basis, the licensees which include AMP Limited, Diverger, Infocus, Australian Unity, Fortnum and WT Financial Group, and have called for a standardisation of all annual consents from superannuation trustees and product providers and a requirement that that the dates align to the date already agreed by a client in an adviser service agreement.
The licensees have argued in their early submissions to the QAR process that “fee consents by Trustees and platforms are confusing for clients as the amounts involved do not reconcile to the total fee an adviser has agreed in their service agreement with the client”.
“The adviser sees the entirety of the client situation however each superannuation account and each platform account require their own consent and only sees their portion of the client funds. Advisers spend significant times reconciling and reporting these amounts to provide the client a consolidated view,” the licensees told the QAR.
Charge a pre-determined 12 month fee – No FDS.