Networth News

Welcome to the Networth News update for Friday the 26th of August.

Opt-in to cost up to $250 per client

Administering opt-in will cost financial planners up to $250 per client, according to Investment Trends research. Investor Daily reports that the estimation is more than twice the $100 per client figure suggested by Treasury. The cost of administering opt-in scheme would widen the gap between what clients are willing to pay for advice and the price of creating a financial plan. The research also found that about a quarter of planners stopped spending money on at least one platform over the past 12 months, with planners citing fee issues, poor service and administration errors as reasons for this decision.

Refocus on new financial products needed

Financial product providers need to focus more on the end user in designing and launching new products. Money Management reports that product manufacturers are finding it much harder to successfully launch new products than in the past. As such, they should shift their focus from being product-centric to focusing more on the experiences of the end user. A panel of speakers from Colonial First State, Bendigo Wealth and Macquarie at a recent conference said many financial services institutions have engaged specialist customer experience consultants to help define product and service strategies by engaging customers throughout the design process.

End of the road for financial stimulus

The global economy is at the end of the road when it comes to providing further fiscal stimulus to ease financial market pressures, according to Harvard University. Professional Planner reports that there is no easy way out of the current financial crisis and there will be a financial hangover from the massive stimulus already provided to global economies. There is no longer is any quantitative easing that can credibly keep the global economy going, according to Harvard University’s Professor Niall Ferguson and Harvard Business School’s Laurence Tisch, who said countries now had to engage in “deleveraging” to ease debt and financial market pressures.

Broaching active versus passive portfolio management

Active portfolio management is too demanding for financial planners with 100 or more clients, according to Zenith Investment Partners. Money Management reports that the active versus passive debate is redundant for such financial planners, however, Zenith Investment Partners chief executive officer, David Wright, said planners with 30 high net worth clients could actively engage in portfolio management. Up to 80 per cent of financial planners favour active portfolio management over a passive approach.