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Dr. Mark Sinclair
Dr. Mark Sinclair, Mentor Education

Fee disclosure causing headaches for advisers

27 August 2013

According to the latest Investment Trends adviser survey, fee disclosure statements are causing the most problems for financial advisers than any other FOFA requirement.

Investment Trends senior analyst Recep Peker has said that, “in previous years’ studies planners were more concerned about opt-in and not being able to provide affordable advice to lower balance clients but now, “they have finally awoken to the administrative burden posed by the annual fee disclosure requirements, with the proportion citing this as a challenge jumping from 12 per cent last year to 48 per cent,” Peker has described the FDS as a “dark cloud over sunny times.”

According to the Financial Planning Association of Australia the flexibility of the FDS requirements is a big issue, particularly when client reviews don’t align with when the FDS is due, and the 30-day provision needs to provide more space.

Peker has also indicated that concerns over the FDS requirement are,” in part caused by a lack of FOFA preparedness in general with only 23 per cent of surveyed advisers indicating they were ready to administer fee disclosure statements two months out from FOFA implementation.”

Despite an overall positive outlook from advisers for 2013, 95% still see challenges posed by FOFA reforms, and FDS obligations as making up a large portion of the concerns.

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