6 monthly valuation guide


Radar Results, M&A consultants to the financial services industry, has provided its six-monthly price guide on the value of financial planning and accounting practices. Since Radar Results lodged a Submission to Senator the Hon Arthur Sinodinos, Assistant Treasurer, regarding a decision on the issue of the grandfathering legislation and how it is inhibiting practices from moving between licensees, industry sources suggest that practice values have fallen. John Birt, Principal for Radar Results, states “Valuations have remained stable; but the effect is that since July this year many sale transactions have stalled”.


An indication of prices as at November 2013:

Revenue Type

Multiple of Recurring Revenue

Investment clients 65yrs+

2.3x to 2.7x

Investment clients age 35-64yrs

2.7x to 3.0x

Risk clients (average age under 50 years)

3.0x to 3.8x

Corporate super clients (down from 0.8x to1.3x)

0.5x to 1.0x

Cs and Ds (investment and risk)

1.5x to 2.5x

General insurance

1.5. to 2.0x

Mortgage clients (up from 1.2x to 1.7x)

1.5x to 1.9x

Accounting fees (lower end fees up from 0.65x, top end down from 1.4x)

0.80x to 1.2x

The multiples above can vary depending on the terms offered by the vendor; actual location of the clients; client ages; and the particular investment products recommended. In relation to multiples paid for risk books, or insurance-revenue based practices, the client’s occupation, premium size, policy type and insurance companies used, are all critical. The multiples displayed above are for high-quality risk clients.

The table above is based on market activity for the last 6 months to 31 October 2013. The multiples above can vary depending on terms offered by the vendor, actual location of the clients, client ages and the recommended investment products.

Change in the price range since April 2013 has been evident in three sectors. The number of corporate super clients selling multiples has again fallen, due to the Government’s MySuper product being likely to ‘take over’ in the next few years; the number of mortgage clients has increased due to the demand for this style of client and trail revenue, with cross-selling opportunities being the main driver; and accounting fees have risen on the back of buyers’ demand. Once again, cross-selling opportunities with accounting clients, along with the ability to offer a ‘one stop shop’, are the drivers here. When a practice which is selling has a total revenue of at least $1M, an EBIT multiple may be applied to its valuation rather than a multiple of recurring revenue. Interestingly, concerns around FOFA have not lowered valuation multiples; if anything, in some states such as WA, VIC and NSW, they have increased. EBIT multiples have remained steady since FOFA was introduced and can vary from 4 times to 6.5 times, depending on the practice. More commonly, an EBIT range is between 4.5 times and 6 times.


What’s called ‘chopping up a book’ can often give the seller more money. Radar Results has many clients around Australia who would love to acquire part of a business. Chopping up books has become popular with sellers who find their business is too large to sell easily. Instead of waiting months, or even years, to find a buyer who wants a large business, sections of the book, like the mortgage loan trails, can be on-sold easily and quickly; allowing risk clients, investments clients and even accounting clients to be separately offered to different buyers. Generally the purchaser is likely to pay the seller a higher price for the individual sections because their appetite has been satisfied.

FOFA Causes Havoc


Radar Results, M&A consultants to the financial planning industry, recommend you visit their stand at this year’s annual FPA Conference to be held in Sydney. From 17 October to 18 October you can have access to Radar’s expert consultants in the area of practice valuations, advice on buying a financial planning business or if you wish to sell, what to do. Not only can the Radar consultants provide advice on financial planning businesses, but also on accounting practices, mortgage businesses, SMSF client registers and risk books.


FOFA was introduced to give more Australians better advice at a lower cost. Some aspects of FOFA are doing the opposite; stopping planners from moving some clients from a commission system to a fee arrangement, basically to save the planner from more ‘paperwork’ and responsibility.

An annual Fee Disclosure Statement (FDS) now needs to be sent out to all clients who pay the planner a fee. The FDS must state what services were provided over the past year and at what fee level, plus what services will be provided next year and at what fee level.

A long serving planner recently suggested that a fee of $1,700 ‘sounds about Older man stressedright’ as a fee for an annual review. When quizzed on how he arrived at that amount, he said “Well, they have about $300,000 in FUM; what do you think John”.  I replied “I think it should be based on what value you have delivered, and plan to deliver in the next 12 months.”  I asked what the planner did for the client now “nothing, unless they call me and ask for a review” answered the planner. This is not an uncommon occurrence.

It would be good if planners could measure what it costs to look after that client for the year, and then going forward, determine a fee based on costs. I know it sounds difficult and complex, but for most of the 90’s that’s exactly what went on with accounting firms I worked with.


Radar Results, M&A consultants to the financial planning industry, recommend the use of specialist lawyers who have experience with financial planning transactions. Principal for Radar Results, John Birt, stated that he had seen many Lawyer symbolsales either stumble or drag out or just fail because lawyers involved in the deal were not experienced. Birt said, “We have developed a panel of lawyers on our website; they’re specialists who are very experienced.” He continued “It’s got to the stage that if a financial planner approached Radar Results to sell their business, and if they didn’t want to use a ‘panel lawyer,’ you’d have to think that there would be problems.” To review a panel lawyer in your city, simply go to our website to order your own DIY Sellers Kit.


Associates for Radar Results have reported that the number of financial planning practices for sale in Sydney and Perth has dried up. Compared to some other states, particularly Queensland, the number of practices for sale is the lowest it has been since 2007. Unfortunately for buyers in these particular cities, the supply and demand curve may force up prices.


There are many definitions of an orphan client, a D grade client and a C grade client.

Measures have been taken to recover lost superannuation accounts and from July 1st money down drain2013, accounts of those members with up to $2,000 who have been unable to be contacted will be transferred to the ATO, with interest to be paid at a rate equivalent to Consumer Price Index inflation. This limit of $2,000 is expected to rise to $3,000 in 2014 and may eventually be limitless. These measures may reduce the sale value of ‘lost members’, which is already at an all-time low.

Historically Radar Results has always received requests wanting to buy as many clients as possible, the smaller the revenue-per-client the better. This trend may well be ending, especially with FOFA and fee-for-service set to dominate in the future.

Valuation guide for your practice

Radar Results has produced its 6 monthly Valuation Guide for those practices and client registers sold since May 2012. The most notable change has been the surge in demand for accounting practices, notably those that do not already offer financial planning services. The opportunity for financial planners to acquire an accounting practice and then market their services to the tax clients is considered extremely desirable. Their services may include loans, estate planning, general insurance and financial advice. This higher demand has, in some circumstances, forced the ‘usual’ multiple above $1.00 for each $1.00 of tax fees. The demand for tax-fee client bases is mainly in the capital cities, whereas demand is less in the country and regional areas.

An indication of prices as at Nov 2012

Revenue Type

Multiple of Recurring Revenue

Investment clients 65yrs+

2.3x to 2.7x

Accumulator investment clients

2.7x to 3x

Risk clients (average age under 50 years)

3x to 3.8x

Corporate super clients

1.0x to 1.5x

Cs and Ds (inv and risk)

1.5x to 2.3x

General insurance

1.5. to 2.0x

Mortgage clients

1.5x to 2.0x

Accounting fees

0.65x to 1.4x

Demand for risk businesses
Demand for risk businesses is as high as ever, particularly since FOFA has basically left this sector alone. Prices paid for good-quality risk businesses in Australia haven’t really changed in three years. They rose substantially during the end of the GFC in 2008 and have clearly held their position as the most sought-after financial-services business. Before you formulate your selling price, aspects such as the client’s age, type of policy, renewal-commission percentage and servicing levels need to be taken into account. A higher multiple is paid for quality clients who have a professional occupation and who pay high premiums due to the higher sums insured.
Demand high for ‘larger’ financial planning practices

Inquiries to Radar Results this year for the acquisition of larger financial-planning practices have increased. When asked ‘what’s considered as larger’, the reply would be ‘at least $2M of recurring revenue’. Boutique planning practices have grown substantially since the GFC through their continued acquisitions; and they are now after ‘larger’ acquisitions.

Recurring revenue (RR) definition confusing Any financial planner who’s looking to sell their client register or business should first agree with the purchaser on what the actual recurring revenue (RR) they are selling is. Whilst there’s no hard-and-fast rule, Radar Results has, for many years now, advised that volume bonuses and commission on regular contributions to superannuation policies should not be included in the definition of recurring revenue.

We even find that sometimes the seller has included GST in their RR figure and, in some instances, neglected to add back the licensee’s service fee. This may change the RR figure by up to 20%. If you are thinking of selling your financial planning business, you may benefit from asking a Radar Results’ consultant for advice before you go to market.

Practices that have been sold in the past on a payment-instalment method, and where the second or third payments are yet to be received, may be affected by the ban on volume bonus. If the revenue previously included a volume payment, then the future instalment payments by the purchaser to the seller may be lower than would have been expected.

Should you merge?

Radar Results has provided financial planners with more than 500 business appraisals since 2006. An analysis of this information indicates that larger practices tend to be more profitable and efficient, with clients paying on average a far higher level of fee. Only those practices that had annual recurring revenue of at least $500,000 were included in the analysis. The larger practices, where total revenue was between $1.5M and $4M, had an average annual fee-per-client of between $5000 and $6000. The results reveal that the fee-per-client for the smaller practices was far lower, between $1000 and $2000.

The results from the analysis may help practitioners plan ahead and measure themselves against the industry average. I’m not saying you should try and mirror the industry average, but at least you should know where you’re positioned and have a plan to exceed this average. I see a lot of inefficiencies in financial planning practices which can be overcome with technology and merging. The number of staff required today to run a good-sized practice would have to be half what it was 20 years ago.
The research showed that the funds under management (FUM) for the practices analysed were on average $192M, with the balance of each client’s account averaging $370,000. The majority of the practices were located in either Victoria, South Australia or Queensland, with NSW contributing only 13% of the results.

The larger practices, with revenue in excess of $1.5M, would usually sell on a multiple of Earnings before Interest and Tax (EBIT), and the highest EBIT within the analysis, as a percentage of revenue, was 59%, with the average being 33%. The EBIT multiple paid today for a quality financial planning business has fallen significantly, probably sitting at around the 4 to 6 times. However, if you can improve the profitability of a practice, then the sale value of that practice today could quite conceivably be the same as it was several years ago; albeit with the multiple falling.

Commonly, there’s too much emphasis on the multiple factor when a practice decides to sell or merge; whereas one should look at the profitability of the practice and, consequently, the value it can add to another practice after it’s merged. Clearly savings on infrastructure costs such as leasing, staff and software can add significant additional profit and, later on, make the new, larger business more attractive as a potential acquisition.
With interest rates moving down over the past 12 months, financial planners can now borrow at rates as low as 7.00% pa to fund the acquisition of a financial planning business. With easier lending criteria and more sellers coming into the market, it’s becoming a buyer’s market. Basically buyers have more stock to choose from. However, there are exceptions to this rule with Perth, Melbourne and some parts of Queensland having very few sellers.

Unlike the period post-GFC when lenders dried up and obtaining finance for acquisitions was almost impossible, many banks today have moved back into this field of lending – the most prominent being ANZ, NAB and St George – allowing planners to expand with confidence, not having to borrow at the previously high rates.

We have recently been approached by a number of large financial planning licensees who have themselves gained funding to assist with the growth of their advisory network. With the help of a tripartite agreement and revenue guarantees by both the bank and licensee, planners can borrow almost 100% of the purchase price of another practice or client register they wish to acquire.
We expect to see many more advisers selling their businesses before 1 July 2013 when new FOFA regulations come into force. There is a belief that the new regulations may have an impact on authorised representatives within respective licensee groups, preventing them from moving to another licensee, unless they want to trigger ‘Opt-in’ for all their clients. In essence, grandfathering could be affected when a client of a financial planner is moved to another licensee, whether it’s by way of a sale to another adviser, or simply a transfer to a new licensee for a better deal.

A survey earlier this year by Radar Results on the acquisition of financial planning practices revealed that the most popular size of recurring revenue sought is between $100K to $250K (39% of 2,488 respondents) followed by $250K to $500K (31%). The appetite to acquire larger practices of $500K to $1M and over $1M polled only 7% each. When you multiply these recurring revenues by a multiple of 2 or 3 times to calculate the purchase price, a loan of between $250,000 and $1.5M would be required to make the acquisition possible.

Price expectation of buyers and sellers

Recently Radar Results conducted a simple poll among the LinkedIn group called ‘Selling or buying a financial planning practice Australia’, and received 103 responses. The single question asked was “What multiple or recurring revenue today would you pay for a quality financial planning (FP) business?” There was a lot of debate over what might be considered to be a quality FP business. Below are the results of the poll.

Multiple of recurring revenue % Poll responses

1.5 to 2.0x 8%

2.0 to 2.5x 43%

2.5 to 3.0x 34%

3.0 to 3.5x 7%

3.5 to 4.0% 8%

Some financial planners said the multiple would depend on whether they were buying or selling; which is an interesting position to take. If they were buying, then they would pay only 2.0 to 2.5x RR; but if they were selling, then they would want a higher multiple. I know it’s human nature to want to have your cake and eat it too, but you can’t have it both ways.

The situation of ‘having your cake as well’ will cause many sales to stagnate. Whilst there may be both a willing buyer and a willing seller, a very wide price-differential starts everyone on the wrong foot. I’m aware of planners who wanted to sell their businesses in 2007/2008 and, as at today, those businesses are still on the market. Both the revenue of those businesses and the multiples they will achieve are now lower. A keen seller could have an offer from a buyer within a week, assuming that they (the seller) are organised and that the sale price of the practice is realistic. A financial planning business will sell easily at a commercially-realistic price, or market price. Radar Results is not in the business of ‘talking prices down’. We are very happy to have our associates around Australia consult in an endeavour to have a commercially-acceptable and happy outcome. I think it’s important that planners realize that, when selling their business to a Radar Results client, the seller does not incur any fees.

Financial planning values stabilise

The price paid for a financial planning (FP) business seems to be on everyone’s mind; whether you’re a vendor planning to sell, a prospective buyer or a licensee. Naturally, everyone agrees that financial planning businesses reached their pinnacle just before the GFC in 2007/2008; and that since then the prices have been trending down. However, the Future of Financial Advice reform (FOFA) hasn’t had the impact on FP values that everyone thought it would, mainly due to the Government’s watering-down, and therefore, FP values have now stabilised.

I’ve been told by a few people that the value of FP businesses, or client registers, may even increase from now on. I’d like to know on what basis – and why. Grandfathering has been mooted as a reason; but haven’t we always had grandfathering?

As consultants, Radar Results is usually involved with about 50 FP transactions per year. These may include the acquisition of a small client register by a Radar client or the sale of a large financial planning business with $1M to $2M of recurring revenue (RR). Radar also provides consultancy services to licensees wanting to help their Authorised Representatives (AR) grow their business. This can be achieved in two ways: organically, with the introduction of professional business coaches into the practice; or by helping the AR with an acquisition. During 2011, Radar Results and RadarBC (Radar Business Coaching) were able to help Licensees in both these areas. There’s recently been a trend which indicates that FP businesses are merging, in order to save on infrastructure costs and staff.

It’s going to be interesting to see where values move during the next few years and what trends develop within the financial planning industry.

The real cost of FOFA

The real cost of complying with the new Future of Financial Advice (FOFA) rules may be much higher for financial planning practices than the Government had thought; and as a consequence, some of the fundamental reasons for introducing FOFA may not be achieved.

Banning commissions is obviously the most radical change, but unfortunately it has come 20 years too late. Changing the entire remuneration system to fee-for-service is merited and will provide certainty of fees paid to the financial planner; and, therefore, added security for the investor. However, it will be difficult for the public to adopt a fee-for-service system which is similar to that used by accountants, since most financial planning clients are used to receiving advice, and not being invoiced. From 1 July 2012 onwards, the effect of FOFA on financial planning revenues could be damaging.

The annual opt-in cost of $11 per client was the result of research conducted by an actuarial consultancy firm, commissioned by Industry Super. Earlier in the year Treasury officials indicated to a Senate Committee that they had seen industry research which suggested opt-in would cost around $100 per client per annum; possibly even $200 per client per annum.

Irrespective of the opt-in cost, the new opt-in reform will only apply to new clients who join a financial planning practice after 1 July 2012. The grandfathering rules have finally been confirmed and they will help maintain the value of financial planning practices; particularly those with many inactive clients, known as Cs and Ds or ‘orphans’.

Research by our consultancy firm, Radar Results, reveals that each of the 71 financial planning practices selling today contains, on average, 544 clients. When you further analyse the figures, these practices can have up to 5 times more inactive clients than active. Over the past few years many financial planning practices have been selling off their inactive clients, wanting to concentrate only on the higher-revenue clients and ignore the inactive ones.

There’s a concern that the sale of a client register from one adviser to another after July 2012 may stop the flow of trail commission and trigger the start of the opt-in rule. On this matter, a spokesperson from Treasury said, “At this stage, I don’t think that transferring the book would necessarily turn the grandfathered commission off or trigger opt-in, but circumstances might vary.”

Inactive clients are usually not offered any service or advice and can be rated either as a C or D grade client or classed as an ‘orphan’. It’s going to be very difficult to have inactive clients sign a renewal notice; or, for that matter, even find out where they are now living in order to issue a renewal notice. And if the trail commission ceases because you can’t get a renewal notice signed, then the value of the client register may disappear.

Inactive clients can make up a large proportion of a practice’s revenue and the cost to make contact with all these inactive clients may be prohibitive. With grandfathering still allowing for the passive trail commission to continue, there’s little incentive to contact them. When FOFA was first announced, the Government said, via the former Minister for Financial Services, Chris Bowen, “These reforms should ultimately encourage more people to seek financial advice”. I suggest the opposite may occur.

Born out of the inquiry into the collapse of Storm Financial and Opes Prime, the intention of FOFA reforms was to make financial planning advice more affordable to a larger number of people within the community, improve quality of advice and strengthen investor protection by having a less conflicted playing field in relation to commissions and volume bonuses. Unfortunately, the opt-in rule will not encourage more people to seek financial advice and neither will it improve the quality of advice; but it will offer more investor protection and certainty of fees. The ban on commission and other volume-based incentives will be a real bonus for the public and offer a high level of protection. FOFA will improve the quality of advice to the public, but not make it more affordable to a larger number.

Clients of Radar Results have been acquiring inactive clients by the thousands and are taking a positive stance on FOFA, providing service and advice to as many of these clients as possible; and, at the same time, growing their practices by cross-selling other products and services.

The insurance industry and life insurance agents and advisers, who specialise in risk products, are blessed. The FOFA reforms will basically have no impact on them – and rightly so. The reversal on banning risk commissions made common sense. Possibly opt-in may be now be reversed?

The Government’s reforms will have little or no effect on fee-for-service practices, particularly those with only A Grade clients; but the majority of financial planning practices are not pure fee-for-service yet and the reforms may be onerous.

Recurring revenue multiples update

Dear John,


Below is an indication of FP recurring revenue multiples since the 2nd FOFA announcement on 28 April 2011, which is also based on actual prices paid for financial planning practices or client registers since May 2011.


                                                                    City CBD                   Regional and Country


                                                           Recurring Revenue                 Recurring Revenue

                                                                    Multiple                                      Multiple


Investment clients with                              2.5x to 2.7x                               2x to 2.2x

average age over 60 yrs  


Accumulator inv. clients                            2.7x to 3x                                      2.5x  


Risk clients                                                   3x to 3.5x                               2.7x to 3x

(average age under 50 yrs)   


SMSF clients any age                              2.7x to 3x                                  2.2x to 2.5x


Corporate super clients                               1x to 2x                                0.75x to 1.5x


Cs and Ds (Inv and risk)                                   2x                                            1.5x




 The multiples above can vary, depending on terms offered by the vendor, actual location of the clients, client ages and the particular investment products recommended. Other factors that influence the prices paid for a FP business are the number of advisers, number of clients, grade quality of the clients, systems and processes within the practice, fee for service arrangements (FOFA ready or not) and the client value proposition CVP that’s currently being provided.



Accounting practices in big demand


Not surprisingly, a number of financial planners are now looking to acquire accounting practices so they can cross-sell risk, investment, loan and SMSF services. Prices paid for accounting fees can vary from city to regional country areas, with $1 paid for each $1 of annual accounting fees being standard in the city and lower prices for country regions. The Cooper Review has had an impact on prices paid for non-business tax fees (Individual tax returns). If you would like your accounting business valued or appraised, then please contact John Birt 02 4384 5670.





New Adelaide Office

Introducing our New Associate – Andrew MacDonald  
Andrew entered the industry in 1984 following a career as a Land and Business Agent. He became a regional manager with Monitor Money and then in 1989 founded his own Securities Licence, Financial Management Services (FMS), as a joint venture with a CA practice. That year he was elected State Chairman and Board member of ASIFA.

In 1993 Andrew established Symetry, and 6 years later he negotiated a joint venture with Perpetual Trustees that included a large payment to Symetry’s stakeholders. In 2004 the business had $1.4 billion FUM and Andrew participated in the negotiations leading to a sale of the business to the CBA group. In the next year he sold FMS into the WHK group and established a new business in funds management involving Equity Trustees, which raised over $300 million in FUM. During this time he was also a Director of MMC Funds Management and was instrumental in assisting it to grow from $15 million FUM to $560 million. These businesses where sold in 2005. In total Andrew has been involved with 14 transactions, either acquiring or selling financial services businesses.


Andrew is the current Chairman of FinaMetrica, one of the world’s pioneers in financial risk profiling methodologies and systems.


If you wish to contact Andrew MacDonald, Phone 0419 791 020 or Email andrew@radarresults.com.au





RadarBC, a division of Radar Results, now has six of Australia’s best business coaches engaged to provide its unique business coaching program to financial planners. Using RadarBC‘s coaches will increase the value of a financial planning practice, leading to a higher sale price, a shorter succession timeframe for an existing partner, or just making the planning business more profitable. Increased profits can then flow into many areas, ensuring a happier business and a happier personal life for everyone. Clients of RadarBC vary from small boutique businesses, earning at least $500K in revenue, through to larger institutions.


RadarBC is unique, offering a blend of coaching, consulting, mentoring and implementation services to supplement a practice’s operational resources. You pay only for what you need, when you need it. Upfront there are strategy coaches working with the principals and executive team, and mentors who have been there and done it. The strategy plan and set of projects are prepared specifically for your culture, for your development and for your business’s vision; they are designed to increase the value of your business, usually within a time frame of 6 to 12 months. However, you choose the speed and depth of implementation.








Future of Financial Advice (FOFA) reforms and the value of your business

Over the past 2 weeks, as a consequence of the recent FOFA announcements, a number of Radar Results clients have said they will not now pay the same level of recurring revenue, or EBIT multiple, that they were prepared to pay before the FOFA announcements. Depending on the style of the planning business, the products used, the client ages and, in particular, their current fee arrangements; Radar Results has seen a decrease in many financial planning firms’ valuations. Radar Results valuers have reduced EBIT multiples by 0.5X since the recent FOFA announcement, equal to a reduction of approximately 10% of a practice’s value.

In the late 1990s I recall being asked to visit a retiree in Charlestown, Newcastle, who had invested $450,000 with a local planner 3 years earlier and, since investing, hadn’t seen the planner again, although he was working in the CBD some 12 minutes away. The retiree was after some service and wasn’t happy; he had been receiving a quarterly statement directly from the licensee for the funds under management (FUM) that he held. The FUM was held entirely in one Master Trust, and the licensee was being paid an annual service-fee payment of 0.8% or $3,600; so over 3 years the retiree had paid $10,800 to his licensee and planner, and had received basically no service. That’s what FOFA wants to alter; as The Hon Bill Shorten, MP, said in his press release on 28 April 2011, “The policy reflects the need to ensure that advisers do not charge ongoing fees where the client is receiving little or no service.”

Shorten went on to say that “volume rebates from platform providers to dealer groups must cease”. Herding clients into a particular administration vehicle for the financial benefit of the adviser and licensee may not be considered credible. Irrespective of whether there were other reasons for substantially using one particular platform, FOFA will eliminate any temptation for revenue to be paid based on volume.

A concern I have with FOFA is the proposal for a 2 year Opt-in. An annual renewal notice must still be sent to all clients specifying what work was performed by the adviser in the previous year, and what was received by them in fees over that period; as well as providing the same details for the coming year. The only difference from the first reform paper, on 26 April 2010, to this latest announcement (28 April 2011) is the requirement for the client to sign, i.e. Opt-in, every second year. If the client is unresponsive or, in other words, if you can’t find them to sign, you must stop taking the commission, trail or service fee.

 But of far greater concern is the Government’s inability to outline a definite grandfathering arrangement. Grandfathering has been presumed by most advisers to be automatic, however, Shorten’s recent statement that “issues around grandfathering arrangements will still be subject of further consultation” is certainly not what planners wanted to hear. The question is whether life insurance agents, who have been building up client registers for many years, may have a part of their register rendered worthless. Certainly, retail risk policies written inside a personal super plan seem to be in the firing line.

Also, the Government’s FOFA proposals have watered down the adviser’s fiduciary duty to a ‘statutory best interest duty’; stating that they, the individual adviser, will not be held financially liable for any breach of their duty.

Last, but not least, is the Government’s tougher stand on gearing. The 26 April 2010 paper banned any adviser fees being charged against the component of an investment that’s geared, but last week Shorten said “an asset-based fee cannot be charged, even on the ungeared component.” This is certainly an attempt to discourage gearing; and any financial planning practice that has a large component of clients geared may need to take swift action to protect their revenue, and the value of their business.