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.
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While ASIC reviews the feedback on its robo advice policies, the US regulator makes it clear it requires the same standard of care from robo advisers as it expects from human advisers.
The Future of Financial Advice reforms have substantially addressed poor practices in the industry, and there’s strong justification for different ways to charge fees for financial advice.
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.
ASIC Commissioner warns on SMSF advice.
There are important features which distinguish the different lifecycle offerings and they can have a significant impact on member outcomes. Rating agencies will need to adapt their processes versus normal balanced funds.
ASIC will be conducting both proactive and reactive surveillance activities, looking for licensees who fail to address FOFA issues. In particular, there are five ‘red flags’ relating to advice practices which ASIC has identified.
Revolution in the application of technology to the delivery of financial advice, in all its different forms, is critical if the issues around quality and access are to be meaningfully addressed.
* A CoreData White Paper suggests the majority of financial planners believe FoFA will have a negative impact on them and their business.
Sequencing risk is the risk of experiencing poor investment performance at the wrong time, typically when the portfolio balance is at its greatest. Here are some hints to recognise and manage it.