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Financial Planners - Your thoughts on FoFA

Discussion in 'Financial Planning' started by invigrr8, 23rd May, 2011.

  1. invigrr8

    invigrr8 New Member

    Joined:
    21st Jun, 2010
    Posts:
    2
    Location:
    Sydney
    Hi Guys,

    Look time reader, first time poster.

    Just wanting to have an insight on your thoughts of the recent changes that were announced after Easter on the future of the financial planning industry (ie. Ongoing Service Package re-signed every 2 years, abolishment of commissions from LCS policies, etc). Working in an admin role for a bank based FP'ing practice, I'm hearing mixed thoughts and ideas of how these changes will affect us working and looking to get into financial planning.

    Careerwise: would it be a good idea to move to a smaller private firm or stay with the bank?

    Your thoughts and opinions please!!! Cheers.
     
  2. builder2818

    builder2818 Well-Known Member

    Joined:
    31st Dec, 2008
    Posts:
    89
    Location:
    Sydney
    They scrap the commissions to advisers.....their fee for service goes up - simple.
     
  3. Michael01

    Michael01 New Member

    Joined:
    24th May, 2011
    Posts:
    1
    Location:
    London
    However, financial planning is a procedure of setting objectives, assessing assets and resources, estimating future financial requirements and making plans to get monetary goals. It can be as simple or composite as you make it, but despite how you make your plan if you follow it, you'll really be on your way to Financial Independence.
     
  4. Lloyd Harris

    Lloyd Harris Member

    Joined:
    27th Feb, 2010
    Posts:
    15
    Location:
    Gold Coast, Qld
    Hi All,

    I am a Financial Planner, and I don't have an issue with much of what has been put forward in these reforms.

    I do not think that it is too much to ask that a client does not pay for a service they do not need/use.

    I think those truly professional advisers out there will thrive.

    Banning on insurance commissions within super is a huge mistake. We have an underinsurance issue which is well known, and it particularly affects the lower end of the socioeconomic spectrum. Removing the commissions paid to advisers on super policies (which happen to be perfect for protecting these clients and their families!) is bad news.

    These clients of do not, and will not, have the money to pay an upfront fee for service.

    Let's hope that common sense prevails on this one.

    Cheers, Lloyd.
     
  5. bolivia

    bolivia Member

    Joined:
    4th Dec, 2010
    Posts:
    10
    Location:
    WA
    Could not agree more.

    Are the reforms going to really happen though? Im not up to date with it all but hear allot of talk.Im not 100% with the facts. (Anyone send through a link if they know of one)

    Is this definatly going to be the case july 2012? If so and the libs get in next election are they not saying they will reverse the reforms?

    90% of all Life/TPD is done through super. Do you think advisers will just give up selling the stuff? Or if life is definatly wanted or essential push for it outside the super environment? I mean their not going to work for free. Are they?
     
  6. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
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    Location:
    Brisbane, QLD
    LOL - having commisions on a product isn't what makes it a good product! Therefore removing them doesn't make it a "mistake" as the product hasn't changed, only your willingness to sell it.

    If potential clients don't perceive that your advice is worth listening to minus the hidden commisions then it's your value proposition that is the mistake, not the unchanged products.

    We don't have an underinsurance issue, we have a vested interest problem in the financial planning industry. I'm not saying that insurance isn't important, but I've seen lots of FPs selling insurance to people who don't need it.
     
  7. bolivia

    bolivia Member

    Joined:
    4th Dec, 2010
    Posts:
    10
    Location:
    WA
    We could start up charity groups and go door knocking and inform the mass's about risk. I mean it’s a fun subject who wouldn’t want to volunteer.

    Australia is underinsured. We are. Financial planners advise a product because most people are not interested or not aware about that aspect in their lives.

    Insurance companies pay advisers to make people aware therefore it works like an hourly rate if you look it in that sense. I don’t know about you but I would quit my job if I stopped getting payed. People who are underinsured are most likely not going to pay for the advice, therefore advisers won’t bother looking into that area. Their adviser not volunteers, they also have to survive in this world and pay bills. If the client is not going to pay for the insurance advice (which in 99% of the time is the case) and the company is not allowed to what’s the point of advising them for free? So the adviser feels good inside when we goes home to his little cardboard box in the gutter.

    What do you think (in the real world) big picture is going to happen when majority of people are unaware about insurance and you stop paying the people whose job it is to inform them about it in conjunction underinsurance problem? Having a stab hear but I’d go with more underinsurance.

    I think Lloyd was stating financial planners role in the whole thing is important and it would be a "mistake" to stop paying the people who inform.

    If you’re saying Insurance is important than without knowing it or not your saying FPs are important as well. Take away the FPs income than you take away the FP, take away the FP than take away the insurance. You may have seen allot of FP's selling insurance that was not needed? I have not as yet but im sure in time I might and that's a terrible thing. I have also seen a widow with 3 children that didn’t mind there FP sold the husband some life through his super fund. You think that bricklayer would of paid for that advice on risk insurance if he was living in July 2012?

    I hope those volunteers whether they be real financial planners or just the doorknockers spreading the word about insurance can help the people out there that are underinsured while at the same time keeping it all compliant for their dealer group and ASIC regulations.