The Financial Planning Association has issued a statement claiming that the government’s recently announced proposed changes to FOFA will create more opportunities for financial planners to become self-licensed.
Dante De Gori, the FPA general manager, policy and conduct has commented that the removal of the reliance on conflicted remuneration will mean financial planning businesses will have to rely instead on client loyalty and elaborated that, “there will be some consumers that want the backing of a big brand and big institution…that will always occur. But there are also people who go to a local financial planner that can provide a more personalised service, and that is what some of the self-licensed guys do really well.”
De Gori emphasised that the new FOFA changes presents opportunities for independent financial advisers who wish to develop a sustainable business model off the premise that clients will pay for quality financial advice, and highlighted that being a niche and a particular market where advisers “can provide more holistic services to those individuals who want and will pay for that service.”
De Gori confirmed that mortgage brokers in 2014 would be at the forefront of a big shift for financial planning where they will still receive remuneration from product providers via the distribution channel and added that, “I don’t know how many brokers charge a fee for service, but the majority would be getting remunerated by the product being selected.” He also warned that those coming into the financial advice space in 2014 that, “the advice and services they provide with their financial planner hat on needs to be paid for by the client directly, and that is probably the biggest challenge.”