QFEs like sales point for retail products
Commissioner for Financial Advisers David Mayhew believes Qualified Financial Entities (QFE) may over time become the effective distribution channel for retail investment products which require limited advice.
Tuesday, October 5th 2010, 7:28AM
by Jenha White
Mayhew said thinking around simplified advice is happening in the UK at the moment and he believes it would fit very neatly with the development of the QFE retail distribution model.
He says in the UK there a lot of work is being done under the heading of simplified advice, a term used to describe a streamlined advisory process under which personal recommendations are made to retail consumers in relation to a defined group of learned investment risk financial products.
He says a need for streamlined adviser processes in the UK reflects the wider public objective of encouraging retail consumers to save for their medium and long term financial needs, "which is the same problem we have in this country".
Mayhew says that simplified advice processes are intended to operate as a middle tier service falling somewhere between the comprehensive financial planning advice on the one hand and execution only services on the other.
"In part this recognises the fact that full financial planning continues to be for the affluent and high net worth customers and is unlikely to be attractive to other retail consumers, whether on cost grounds or because of the comparatively straight forward nature of their individual circumstances and needs."
He says simplified advice processes can be delivered in a number of different ways, including through the internet, the telephone or on a face to face basis which makes it possible to devise processes that are fully automated with minimal human involvement.
He believes such an approach would fit very neatly with the development of the QFE retail distribution model.
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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