The Future of Financial Advice (FOFA) fee disclosure requirement has become a challenge for many advisers as the ways they currently capture client information is incomplete.
"The challenge advisers face with fee disclosure is capturing every element and every aspect of the commission or what they do," IRESS general manager of wealth management solutions Tizzy Vigilante told InvestorDaily.
"Not all of them are actually using or capturing the information."
Under the FOFA reforms, advisers must provide an annual statement outlining the fees charged and services provided must be provided to clients, in line with the opt-in requirement.
However, dealer groups struggling with the obligation are not segregating prices and services appropriately.
"In order to do your fee disclosure statement depends on how you capture all the different items and for some planners, you'd have to look at how they've been running their business," Vigilante said.
Advisers who are able to provide complete client information into the software will find the fee disclosure process generally simple, she said, adding that practices must now review its processes as fee disclosure now forms part of what they do.
IRESS has been processing complete fee disclosure statements efficiently through its revenue management system, Commpay, which provides reporting of historical fees for each client's specific disclosure. It is fully integrated into Xplan.
Planning software must continue to provide rich functionality for advisers and always be across what's happening from a FOFA perspective so that it captures and provides the information [required] through the technology, Vigilante said.
"As the technology and software [provider], we need to be two, if not five steps ahead so we already had fee disclosure and opt-in built."
