How should we define fee-for-service?

With the lofty goal of helping pro­fessionalise the role of financial advisers, there is no question that topics such as determining what type of fee model leads to best advice will be making reg­ular appearances in the pages of Professional Plan­ner. As forward-thinking financial planners make the switch away from commissions, the debate that used to swirl around commissions is segueing to animated discussions about payment for advice – a healthy sign that the movement toward a more professional in­dustry is well underway.

Over the past few years, Steve Tucker has been ruf­fling feathers with his views of, among other things, the role of commissions in financial plan­ning. In “The Man from Zen,” we take a closer look at MLC’s outspoken CEO to see what the shouting is all about.

If moving from a commis­sion-based to a fee-based prac­tice is the goal, what does it take to get there? And what are some of the obstacles along the way? Peter Switzer, who runs a successful fee-based business in the Sydney area, chronicles his colourful journey in “A Change of View”. Neil Ken­dall, the subject of our Planner Profile, undertook a similar task when he transformed a traditional com­mission-based practice into a fee-based business; the results have been overwhelmingly positive. Yet Neil still suffers from the financial planning “cringe” factor, a noteworthy concern from someone running a successful business.

If keeping up with paperwork and compliance isn’t difficult enough, the ‘advice’ element of the job offers even more challenges. From SMA to equities, reverse mortgages to estate planning, the growing market for information and products can be rather overwhelming.

Professional Planner hopes to make things a little easier with regular insight into some of the topics involved in giving good advice. In this issue, for example, a team of equities specialists presents their crystal ball analysis of the market in “Change in the Air”. Property, another possible player in a client’s portfolio, gets a similar treatment when Frank Gelbert, chief economist at BIS, provides some definitive views on Austra­lia’s property outlook.

At Professional Planner we are firmly committed to the im­portance of philanthropy; as a potential part of the individual client portfolio and on a larger, corporate scale. Therefore it seemed appropriate to kick off the magazine with a focus on the basics: how to raise the issue of engaging in philanthropy with your client.

Our goal, of presenting an informed discussion and forum for debate on the subject of making plan­ning more professional, relies on sourcing the best information available. As a reader, your input and insight is a key part of this process and I encourage you to contact me with your feedback, comments and criticisms.

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