Client Service

I believe one of the key roles of an adviser is to change clients behaviour for the better. Most people do not make the best financial decisions. Whether it be failing to save enough, chasing returns, keeping Foxtel but cancelling insurance or simply listening to our hearts more than our heads, all but the best of us are guilty of making less-than-wise choices.

Most Australian advisers are currently absorbed in altering their business practices to comply with the new FoFA Legislation, and a particularly large issue is deciding on when and how to deliver their Fee Disclosure Statements (we now have a three-letter F word … the FDS!). We have heard of a number of advisers who are planning to post out all of their FDS's on the 1st of July, indeed some licensees are even suggesting this is a good option. It may have been suggested in the ASIC regulatory guide, but we think this is a dangerous strategy, and there are far better options that are still compliant with both the wording and the intent of the legislation.

When an advice business ceases to receive trail commissions it does not mean that they must stop receiving recurring income, and start relying on constantly winning new clients on a transactional basis. One of the most valuable components of advice businesses is the fact that they can generate recurring income from long-term relationships with their clients. It’s just that in a fee-based business, this recurring revenue may not be as ‘passive’ as it was in a commission-based business.