The Financial Planning Association is pushing for acceptance of its advice-based fee model for financial planning by incorporating it with the recently released “Principles to Manage Conflicts of Interest”.

Members will be required to communicate the cost of advice to clients and disclose ongoing advice fees. Fees will also need to be agreed between adviser and client, as well as payment type.

FPA Chairman Corinna Dieters says the principles will lead to better client understanding of advice value and its relevance and cost.

“There is growing awareness among consumers that financial planning advice is a professional service which is valuable in its own right,” she said.

Ms Dieters says clients are taking more control of the advice transaction and will often choose how to pay for the advice.

“Market forces are already shaping a new generation of financial products that offer a flexible fee structure,” she said.

“In some cases that choice may be to pay for advice via a product, with the amount fully disclosed and agreed between client and adviser.”