Who will be the FoFA winners?DOWNLOAD
December 19, 2011: At a time of fundamental change to the way financial advice is delivered and received in Australia, the winners from the Future of Financial Advice (FoFA) reforms will be those with a strong customer and adviser focus as well as an awareness of the disruptive plays already happening across their sector, according to professional services firm Deloitte.
In a communications to its clients The future of financial advice – opportunities and challenges the firm has warned that the increased transparency of costs driven by the reforms, will provide significant challenges and opportunities, based on organisations’ size and levels of preparedness.
According to Deloitte Human Capital Partner, Jason White one of the greatest challenges for distributors will be the people and change management impacts of FoFA, encompassing remuneration models, education and capability development, adviser engagement and even behavioural change at an adviser, employee and customer level.
“As the demands on advisers increase post FoFA, we can expect that advisers will leave at an accelerated rate,” White said. “The challenges of replacing these advisers whilst continuing to attract new people to the industry should not be underestimated.
“Balancing the objectives of enabling advisers to operate in the best interests of their clients, while keeping them engaged and motivated in a commission-free world, will be a critical. It will require comprehensive training programs focussing on finding new sales and service capabilities that provide the platform for attracting, developing and retaining customers in a fee for service environment,” said White.
“The success of these programs will also determine whether wealth management organisations successfully attract, retain and support adviser talent and ultimately position competitively for the future."
Covering the people and change management aspects of the recently released Deloitte FoFA report, White specifies how these reforms represent fundamental changes to the way financial advice will be delivered and received in Australia when introduced to Parliament in early 2012.
“FoFA means today’s advisers will need a greater array of capabilities and competencies in order to succeed. This will include technical skills, interpersonal excellence, business development skills, client engagement ability and practice management abilities.”
The report looks at what FoFA will mean for business across six perspectives, with the first set of legislative requirements set to commence July 1, 2012.
The six perspectives are:
“Ultimately a successful organisation, able to capitalise on the new opportunities the reformed environment presents, will be one that has supported its advisers to own the changes and encouraged them to embrace their new roles and responsibilities. It will have equipped them with the right capabilities, motivated them to high performance and redesigned the current pay systems to fully reward their achievements,” he finished.