A practice owner specialising in the intergenerational advice space says the passing of the Life Insurance Framework bill “needed to occur”, despite acknowledging the potential impact on long-standing risk firms.
Speaking exclusively to Risk Adviser, principal and owner of Brisbane-based Ascent Wealth Management, Stephen Nielsen, said that advisers running long-standing risk practices have already gone through a lot of change over the last 20 years as financial advice transitions from being an industry to becoming a profession.
However, he suggested such advisers work with people who are transitioning their businesses following the passing of the LIF bill through Parliament to get some ideas about what may be beneficial.
“The support will really come from the adviser network, I honestly believe, as opposed to being provided by the life companies,” Mr Nielsen said.
“I think we need to actually reach out to each other because the answers are in the room, but be a part of your community and listen and share.”
In his presentation to the AFA Genxt Conference last week, Mr Nielsen said an important by-product of his firm’s intergenerational wealth strategy, implemented eight years ago, was the new conversations he was having around remuneration.
“In a lot of practices, parents will actually pay for things like insurance premiums and to subsidise the cost of the advice budgeting and the other services that are provided to the next generation,” he said.
Mr Nielsen also explained how, with 60 per cent of his firm’s client base having an intergenerational advice element, he has integrated the complexities around aged care into his advice offering, pricing that accordingly.
“It’s not so much of a long-term relationship once a person moves into a shared facility. In that, we’re basically having them set for their dignity and comfort for the remaining time, so we really want to find a way to be remunerated for that piece of work,” he said.
“We would have a flat fee based around complexity, starting at $1,650 which would be the minimum fee.
“It sort of reflects the hours and time taken in getting that advice together. So it’s really helped having that conversation.”