FDS preparation work should not be wasted

Money Management
February 10, 2014 AEST

Financial planning practices that have already prepared for the implementation of fee disclosure statements (FDS) would gain little benefit from the work if they chose to shelve it in the face of proposed amendments.

Under the original Future of Financial Advice (FOFA) reforms planners would have been required to provide FDS to all clients, with the recently announced amendments shifting that to new clients signed after 1 July 2013.

However The AstuteWheel co-founder Hans Egger said planners who have already engaged in the process of providing a FDS for all clients should continue to operate in that manner or risk losing opportunities to secure their client base.

Egger said those planning practices which had expended resources in organising their client lists and improving their value propositions were “like a nation upgrading their infrastructure in preparation for a war that never eventuates – termed a ‘peace dividend’: they can take advantage of perhaps the best organised office they have ever had, or waste the opportunity”.

According to Egger, who is also a principal at advisory-group Lumix Wealth, planners who have prepared for the proposed full FDS regime would be able to strengthen relationships with active and non-active clients by demonstrating their service offering and shifting them to ongoing service agreements.

Eggers said the preparation for the full FDS regime was akin to the surge strategy adopted by the US Army in Iraq in 2007 in which 20,000 troops were redeployed in an effort to change the outcome of that conflict.

“Employing a surge strategy for reviewing clients should provide a similar profound and long-term benefit to planners’ businesses. They should therefore take this opportunity to contact those clients who haven’t been reviewed for many years and identify ways to add value and broaden their services offering.”

“You have done most of the hard work already. Your practice will no doubt face new conflicts in the future. It will be the practices that strengthened their positions in 2014 that will survive and thrive in the future.”


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