The Federal Government has formally responded to the Parliamentary Joint Committee on Corporations and Financial Services’ Inquiry into Financial Products and Services in Australia (the so-called Ripoll report), and laid out its blueprint for the future of financial planning.
The proposals largely reflect the content of the Ripoll report, released earlier this year, and so the government’s response contains few, if any real surprises. In general, the response has been welcomed as an effective remedy to the real and perceived conflicts that plague sectors of the financial planning industry.
In some areas the Government has disagreed with Ripoll; in other areas it has gone further than Ripoll recommended. In both cases it has set out clear reasons as to why. Overall, there’s little in the Government’s response that wasn’t widely anticipated. The onus is now on the financial planning industry to adapt to the proposals and have them in place by July 1, 2012 – if not before.
But is it fair to expect planners to bear the burden of these changes alone?
What support and assistance should the financial planning community expect from manufacturers of the products and services that they recommend?
For example, if planners are to be paid directly by clients for services rendered, what should planners expect of product manufacturers in terms of stripping the “cost of advice” out of product fee structures?
Is there need for a clear and unequivocal statement from the product manufacturers – perhaps through the Investment and Financial Services Association (IFSA) – that financial planning is a valuable service, and well worth paying for?
How can the planning community be helped to articulate its value proposition to a population used to the idea of “free” advice, or conditioned by advertising to believe financial planning is evil?