It happened just a fortnight ago but no one seems to have noticed.
It made not a ripple in the media and no doubt financial planners are too busy studying to be expecting even more disruption. Brace yourself, though, because that’s what’s on the way …
Annual, In Advance Opt-In is coming
On 20 August 2019 the Federal Treasurer, Josh Frydenberg, announced that legislation will be introduced to Parliament before June 30 next year that will effectively illegalise the current Opt-In and FDS arrangements. This move is in response to the Royal Commission’s dramatic coverage of the ‘fees for no service’ scandal. But wait, there’s more …
Warning: adviser not independent
Legislation will also be tabled by the same date that will mean financial advisers are not permitted to provide advice to a new client without first declaring whether they are classified ‘independent’ under the law – and if not, explaining the reasons why not. The Royal Commission’s exposure of the causes of inappropriate advice triggered this one.
These reforms add to the complexity that is already facing advisers, burdened by the FASEA education requirements, the loss of legacy commissions that were supposed to be grandfathered, and then there’s the looming membership of an as yet unapproved Code Monitoring body (it’s just six weeks away, folks).
“It’ll never happen”
A year ago could you have seen any way possible that the banks would be falling over themselves to get out of wealth management? Or that within the first six months of 2019 nearly 10% of advisers would have left the industry, never to return, and the trend is still climbing? The government has a mandate and is fearlessly implementing everything Ken Hayne recommended. It’s sink or swim time.
The Profession of Independent Financial Advisers has published a bulletin for advisers that explains …
• what the changes mean,
• how they will impact advisers, and
• recommends a roadmap to avoid the problems this legislation will create.
Enter your details in the form below for more details.
In the meantime, think about your practice and how it deals with ongoing remuneration. Ask yourself what you need to change, if anything, to ensure that your client remains a client if they don’t front up at your next annual review meeting.
Plus, look hard at your lead generation practises – if you are not set up with strong referral arrangements then what steps do you need to insert into your client acquisition process to ensure that the conversation around independence can be ticked off, succinctly and effectively.