No adviser fee change after FoFA report

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More than half of Australian advisers involved in an in-depth research report have not made any changes to their SMSF fee structure as a result of the FoFA reforms.

The report, titled Intimate with self-managed superannuation was commissioned by the SMSF Professionals’ Association of Australia (SPAA) and Russell Investments to provide insight into SMSF moving forward.

Despite the move toward fee for service after the reforms, 56.2% of financial advisers say they haven’t informed their trustees about the changes to fees because it won’t affect their current fee structure.

Andrea Slattery, CEO of SPAA, told Wealth Professional it is clear from this that most advisers were already using and benefiting from fee for service long before the reforms, indicating that the change won’t affect the industry as much as some believe.

“The majority of people who provide advice in this area changed their fee structure a long time ago because they realised that was the way to add value,” she said. “If you’re adding value, clients are willing to pay more for your services. The model should mean that business is better.”

Despite this, the report also highlights that uncertainty around fees charged for advice remains an issue that needs to be addressed by advisers in the coming year.

And aside from that majority who note no fee changes ahead, two in five (38.5%) advisers have informed their clients that there will be a change in the way they pay for advice, and a small minority (4.4%) said they have not yet got around to it.