Statements by Brian Hartzer, CEO of Westpac, confirm that financial advice delivered by advisers to the mass market is not financially viable, and technology is the solution if most Australians are not to miss out.
Tag Archives | FOFA
In a response to Graham Hand’s article on why roboadvice is struggling, the case is made that conventional financial advice will increasingly confine itself to the wealthy, and the mass market needs another solution.
‘Suitability’ of financial advice is something unlikely to be addressed by the Royal Commission, but its adoption and regulation is crucial to the improvement of the wealth management industry.
Many people have changed their minds on whether the Royal Commission was a good idea. What the fact-finding reveals though is an age-old lesson in economics: outcomes gravitate toward incentives.
The characteristic tone of the Royal Commission was set on the first day focus on financial advice, and no witness has been able to defend commissions to advisers and the vertical integration model.
Grandfathering and the implications for commissions has become a major flash point, and the Royal Commission is focussing on problems created when advisers are given the wrong incentives.
Following the Ripoll Inquiry in November 2009, the Labor Government formulated the Future of Financial Advice proposals. A lot has happened since, and the Royal Commission is dealing with the consequences.
Government plans to amend FoFA are in tatters, due mainly to ill-informed comments about the nature of financial advice. ‘Best interests duty’ goes way beyond ‘duty of care’ used in other professions.
A broader study of household financial situations reveals that quality financial advice eludes the very people who would benefit from it most. Every Australian should have equitable access to our financial system.
In part 2 of the great fee debate, it’s the investors’ turn to reassess their expectations regarding management and performance fees, and to understand what it takes to find (and pay for) top managers.
The recent push for greater transparency on asset management fees has reignited the debate about what is fair and reasonable. Both managers and investors need to reset their expectations to find the common ground.
When two Nobel Laureates sit down to discuss the topic ‘Why does the public hate us?’, you know there’s a major problem. And the Murray Interim Report raises many concerns about wealth management in Australia.
The funds management industry is undergoing consolidation and evolving rapidly, under pressure to provide better service and high returns while cutting costs. Chris Cuffe discusses the present and the future.
FOFA demands higher professionalism, improves client confidence and presents opportunities for reputable advisors. The cleansing effects of the legislation are expected to outweigh the costs in the long term.
Australian superannuation is a highly dynamic industry, as this review of 2013-2033 shows. For many retirees, institutional funds, whether industry or retail funds, have not been able to compete with the attraction of SMSFs.
Managed funds in Australia hold one trillion dollars in assets, double SMSFs at $500 billion. Compulsory superannuation flowing into retail and industry multisector funds will ensure managed funds continue to prosper.