Dealer group sustainability rests on FOFA-readiness

Feb. 28, 2013 - PRLog -- The long term sustainability of Australia’s financial services dealer groups rests on the robustness of their FoFA-readiness program, said Guardian Advice head Simon Harris.  

Risk-focused boutique dealer group Guardian Advice's adviser network is well on track for FoFA-readiness.

Since 2011, Guardian has had a team of FoFA experts in place offering advisers a comprehensive FoFA-readiness program, which educates and supports advisers on the likely implications of FoFA on their practice and offers fortnightly communications to help advisers understand any significant changes to the regulatory framework on financial advice.

With FoFA’s start date only four months away, Guardian advisers will be transitioned to a Fee-for-Service model by 1 July 2013, with robust systems and processes in place to also communicate to advisers annual fee disclosure obligations under FoFA.

Despite the unprecedented wave of regulatory change for advisers, Guardian believes the regime has given insurance advisers a slight advantage over investment and super advisers because there has been less meddling in their remuneration models. In turn, this has caused a proliferation in risk dealer groups, as risk revenues remain more sustainable.

Guardian Advice’s position on recent regulatory developments

Guardian Advice head Simon Harris said: “I am disappointed that the Government is considering changing grandfathering rules, as this would hurt advisers and their clients by adding complexity and cost to the advice process. This would be a bad outcome for the industry and another example of policy on the fly.

“Equally disappointing is that the Government is considering more changes to superannuation. Since 2009, we’ve already had ten significant changes to super. Both political parties should keep their hands off super - it’s not a honey pot to be continually dipped into whenever there’s a tax shortfall. Consumers need confidence in the super system, and so do advisers to be able to manage their clients’ super affairs.”

Commenting on recent regulatory developments impacting the survival of the industry, Mr Harris said: “Sustainability in our industry is necessary for all participants to continue to thrive into the future, and we need to self-regulate.

“A more sustainable industry structure requires improved business processes and automation, simplified products, greater end-customer connection and a remuneration structure that better aligns the interests of the customer, adviser and manufacturer.

“Guardian is working hard with all of its preferred insurance partners on alternative remuneration structures to ensure more sustainable outcomes for all stakeholders.”

-ENDS-