Cost of financial advice

It’s in the client’s best interest that their financial adviser remains in business by charging a decent fee and make a decent profit, decently!

Laws introduced by the Federal Government since 2001 have steadily increased the cost of advice to be more than $3,000 per client, per year*.

The cost of AFS Licensing per adviser is around $38,500 per year* which includes #compliancemanagement of the Corps Act 2001, ASIC Regulations, FASEA, Privacy Act 1988, AML/CTF Act 2006, AFCA, Tax Practitioners Board, ACCC, FPA Professional Code of Practice 2010, FSC Life Insurance Code of Practice, SIS Act 1993, SIS Regulations 1994, and attorney and employment laws of each state and territory.

It takes more than 40 steps to deliver advice without breaking the law.

Before #FOFA and #FASEA laws were introduced, most financial practices subsidised the cost of advice through a system of asset fees and commissions a bit like #PrivateHealthCover, ie everyone pays the same even if you don’t use the service until one day you need to.

It’s time the Federal Government either wound back some of the laws to reduce costs or subsidises advice under a #bulkbilling arrangement with Licensees.

* References:

Sarah Kendell, Practice Owners Urged to Drop Low-Value Clients, IFA, 23 July 2020

Simon Hoyle, $38,500 the new benchmark for licensing fees, Professional Planner, 21 August 2020

 

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