United sector can better articulate the value of advice

The proposed merger of the Financial Planning Association (FPA) and Association of Financial Advisers (AFA) is a step forward – not just for the profession, but for all those yet to benefit from financial advice.

The last time I was overseas was in 2019, before the COVID-19 pandemic. I had travelled to Portugal and then the UK with the Association of Independently-Owned Financial Professionals (AIOFP), where I was invited to deliver a presentation to a crowd of Australian financial planners in London. At that time, the fallout from the Hayne Royal Commission was still fresh and the Financial Adviser Standards and Ethics Authority (FASEA) was the new enemy.

My presentation was about unity. I made a bold suggestion: rather than three industry bodies representing a profession with dwindling numbers, why not unite to fight for both the profession, its clients, and future generations of clients? The final slide on my deck was a picture of my son, Louis, who was nine months old at the time. I indicated that he too may need financial advice at some stage. What shape would the industry be in then?

While my presentation in London went down like a lead balloon, it is pleasing to see three years later that some groups are willing to set aside their differences and come together for the greater good.

FPA CEO Sarah Abood and AFA CEO Phil Anderson recently spoke to Money Management’s sister publication ifa about their proposed merger

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Abood took note of feedback from both regulators and the Government that describe the varied advice and advocacy points they receive from the profession. She hopes to see “a singular set of suggestions” to bring more steadiness and authority into the sector.

“That alone gives us a much greater chance of achieving the positions that are really important to our members and to the profession.”

Anderson noted that the distinctions between the AFA and FPA, while clear within trade media, is less so in mainstream media. This is where a combined expertise is most needed, he explained.

These observations by both leaders demonstrate a clear willingness to present a united profession to the public. Anderson’s comment on mainstream media is critical, for it is there that the next generation of Australian consumers will read about financial advice. I doubt many of them are reading these pages.

Trade media plays an important role in financial advice. It is where new policies are announced, best practice is shared, mergers are revealed, and where major issues are analysed. But it is the mainstream media where consumers go for their information.

With the Quality of Advice Review well underway, the profession has a major opportunity: to deliver a clear and simple message to Australians about what financial advice actually is and how it can help them.

This may seem obvious, but it is not, which goes to Anderson’s point. 

The messaging around advice and its value to the average Australian has become so muddied by years of inquiry, Government intervention and industry in-fighting that most Australians now squint at the profession and see a complex mess. 

For the industry, affordability and accessibility are the greatest hurdles for consumers. But the highest hurdle is actually articulating the tangible benefits of advice to the average Australian who invests in real estate, is curious about crypto and ignores their superannuation.

Hopefully Michelle Levy’s review delivers a new, solid foundation upon which a united profession can build brighter futures for more Australians.