Focus on value not fees: AFA
Friday, 4 July 2008 12:10pm
The Association of Financial Advisers (AFA) has put its foot down that advisers' commissions should not be abolished because the existing system promotes choice and value among clients.
AFA national president Dennis Bateman stated that mandating a single model of remuneration is wrong. Bateman said such a model would distract everyone from the main purpose of working with advisers, which is building, protecting and managing wealth for Australians.
Richard Klipin, AFA chief executive added choice into the mixture and said the different remuneration models are essential for tailored advice and fair pay for advisers.
“The position we're taking is that depending on your client segment, depending on the client and type of business you ran, there needs to be choice for you as the adviser and the client to determine what's going to fit best in your particular circumstance," said Klipin.
For those who fear that a commission system may hike up the price of products for clients, Klipin said both the Federal Government and the Australian Securities and Investments Commission's (ASIC) endeavours to make revenue statements transparent have helped clients find value when shopping for advice. Clients in turn are able to walk away from advice they feel gives them little value for money.
“When the debate is only focused on price, people then don't focus on the value. And there is a strong relationship between price and value. Like any other professions, there's a price and charge to be paid [for value] and that's the whole equation.
“The industry and the profession need to show the community that we build value, help people achieve their financial goals and lifestyle aspirations. But like any other business there's always a price to be paid for that," said Klipin.
Ruth Liew
