Increased focus on efficiency likely to be real legacy from FOFA

A survey of financial advisers (commissioned by Zurich Australia) has found the single biggest expected outcome – and most likely legacy of the upcoming FOFA reforms – is an increased focus on efficiency.  

The majority of advisers also reported that they see greater use of technology (including mobile technology) as the change that can do the most to help them improve their efficiency.

Conducted by Beaton Research in December 2012, the telephone survey of 213 randomly selected advisers, found that 40 per cent of advisers rate ‘becoming more efficient in the way they deliver advice’ as the single biggest change FOFA will force on their business.

Philip Kewin, General Manager Retail for Zurich’s Life and Investments business, said the results represented a new way of thinking about the likely legacy of FOFA.

“Most of the commentary and research to date has been about being FOFA-ready.  We think these findings really show a different way of looking at FOFA and its future impact; and that is, examining how advisers are using this as an opportunity to improve the way their business operates.

”There is a well documented gap between the cost of providing quality advice and what consumers are prepared to pay and FOFA will add more cost pressures. Enhancing the efficiency with which advice can be delivered is not just about cost containment it’s about value; the value advisers offer to their clients and the value they are able to capture for their business”.

Mr Kewin also said it made sense that this move towards greater efficiency would lead to an increased focus on technology; the survey found that advisers felt that technology had more power to improve their efficiency than a range of other initiatives, such as outsourcing, client segmentation, and process re-engineering.

“Almost 55 per cent of surveyed advisers rated ‘Making more use of technology including mobile technology’ as important or very important in terms of their ability to improve efficiency.   We are already seeing strong evidence that advisers are acting on this sentiment, with a 2011 survey finding that 34 per cent of advisers owned a tablet, up from just nine percent in 2010.  And of those with tablets, 21 percent used them with clients in 2010.  By December 2012 that figure was up to 31.9 per cent.  We think this number will grow over time, in line with increased consumer ownership of these devices and ongoing development of apps tailored to the specific needs of advisers.”