The future of advice fee structures

Well clearly this bloke knows nothing at all, I also doubt he has ever built, created, owned, or purchased any advice business in his life! Yet he seems to have a lot to say about the subject. I have purchased five practises and all have come with Grandfathered trail commission, what are you surprised about! That is how all product was manufactured by the actuaries, not planners.
I have hired five additional staff in my practise to service and review these clients, they are some of our biggest clients and receive the same service as those on advice fee structures, the only difference is that trail commission tops out at .6% and the average industry advice fee is 1%. You tell me Romic how charging clients .4% more is good for the client!!!

After working and talking with numerous financial planners, many have expressed their opinions that this is needed in the industry to ensure ethics in the industry are upheld between the adviser and their clients, ensuring clarity of the service and products.

In respect to the comment of "Advisers with insufficient portfolio management skills (Experience) will be at a distinct disadvantage" there are alternative solutions for advisers and their clients. Instead of advisers being disadvantaged and paying retail rates for average and underperforming managed funds, there are products on the market that enable the adviser to empower their business and their client's portfolios.

A change in practising from the old ways is needed, we will see advisers benefiting their clients, themselves and the financial industry. The financial services industry is changing, expectations of the clients are too, and so will the products that are on offer to the retail market. The question is: Who will be the leaders?

What's more important than ever are Independent financial products that don't seek to vertically integrate, are independent, trustworthy and incorruptible.

Don't forget, Romic is also a salesperson not just a consultant or commentator - this would perhaps explain why he is downplaying adviser ability in terms of portfolio management - solution - DFS Portfolio Solutions. Romic may also be confused about what a product is, ASIC have their own definition and he is certainly selling one, managed accounts.

Selecting a managed account is not a strategic decision but a product decision. If Romic were a retail financial adviser (is he?) he would perhaps understand better that a first-year apprentice builder is probably better served in CBus than a managed account solution that may require an SMSF - irrespective both would have a price tag which would need to be considered in light of the benefits.

An adviser needs to be able to defend their recommendation and prove that it is in the client's best interest - this would be down the individual client and how their best interests are served - not Romic's philosophy around value investing and bias to his managed account sollution.

Being a financial adviser is not a question of picking either strategy/planning advice or product advice - almost every strategic decision involves product choice (whether one product, another or none) even if a recommendation to change a product is not made then a recommendation to retain the existing product is inferred.

Best Interest Duty dictates that strategy and product go hand in hand, ignoring strategy and you are just selling product - fortunately most advisers are beyond this. Ignoring product though and there is no consideration for the best interests of the client.