Adviser survey finds concerning lack of FOFA preparation

By Chris Kennedy
 — 1 minute read

A Midwinter survey completed by 330 advisers has found a concerning lack of forward planning on key Future of Financial Advice (FOFA) issues such as opt-in and fee disclosure statements (FDSs).

The planning software provider surveyed clients from predominantly mid-tier and boutique licensees and found 31 per cent believed they had adequately identified opt-in clients.

Two fifths of respondents said they planned on relying on the opt-in exemption through being bound by a professional code of conduct, which Midwinter managing director Julian Plummer told InvestorDaily was higher than he had expected.


More than one third (35 per cent) had not yet begun to identify opt-in clients, and half (49 per cent) were not yet sure if they would be giving clients the option of opting-in electronically.

“There’s still a lot of work to be done within the industry for something so basic. It won’t be hard to do, it’s just going to take a long time to do it,” Mr Plummer said.

The results also showed FDS requirements are causing some confusion for advisers, according to Mr Plummer.

“If you look at the question, ‘Are you confident in knowing what information must be disclosed in a fee disclosure statement?’, only 22 per cent are ‘very confident’. The remainder are either 'reasonably confident' (64 per cent) and 13 per cent are 'not at all confident'.”

Less than half (45 per cent) were sure they would be in a position to start creating FDSs by 1 July, while a fifth either said they would not be or that it was ‘unlikely’.

“That is a huge concern given it’s only three months away,” Mr Plummer said.

Only 27 per cent were confident they would be integrating their FDSs with data feeds from a commission system such as EasyBroker or CommPay, with 39 per cent unsure and 34 per cent not planning on integrating.

“So 34 per cent will be doing it by hand, which is a rather scary proposition. It’s not easy, and if you have a couple of hundred clients it’s going to take a long time,” Mr Plummer said.

“It’s not like portfolio manager data feeds where there’s one specific format. If you look at a BT or a CFS, any platform provider, their commissions come in a different format. None of the rows and columns are consistent - their definitions of what every column is are slightly different. It’s not uniform, which is causing the problems here.”



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Adviser survey finds concerning lack of FOFA preparation
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