An interesting idea came to me last week regarding the issue of fee-for-service advice.
If as many advisers are fee-for-advice as claim to be, and they are truly fee-for-advice, and people are accepting of the idea, then why has the industry slowed down so much since the investment markets have been down?
Quarterly contributions to retail and wholesale funds were down around $4.5 billion in the last quarter, according to preliminary results from InvestorSupermarket, representing a decrease of more than 220 per cent.
Anecdotally, financial planners have had fewer new clients to see in the past six months. It's interesting. Some may say the impetus of the superannuation changes last July would have impacted on this. So many new clients came at that time.
However, the reality is not a lot of people are currently seeking financial advice.
What has changed besides the markets being down? And we think financial advice is a holistic offering, giving more than investment advice and product placement advice - yet where are the clients on this?
Has this offering been enunciated to clients and prospective clients? While financial planners know what they are offering or hoping to offer in the new world of financial planning, is it a secret to all but the industry?
What better time is there than now to get this message out?
Holistic advice can be given at any time of the market cycle, and issues such as super and tax structures and estate planning are perennially important for your clients.
The cost of advice should remain static if your advice is not investment based. And if you are truly fee based, like accountants, you should not be seeing any dip in income this year.
