ASIC kicks off affordable advice project
The Australian Securities and Investments Commission (ASIC) has kicked off its consultation process around making financial advice more affordable with the release of a consultation paper today which freely acknowledges that consumers are finding it difficult to “access good-quality affordable personal advice”.
The consultation paper CP 332 has given financial advisers and other stakeholders until 18 January, next year, to file a submission and has flagged stakeholder roundtables for early next year.
The consultation paper’s opening key point is that “The financial advice industry has undergone considerable change in recent years. Many large financial institutions have either sold or reduced their financial advice businesses. At the same time, a number of financial advisers have either left, or signalled their intention, to leave the industry”.
“We know from previous research that consumers want better access to limited and affordable advice, but that many industry participants find it challenging to provide this type of advice. In light of this, a particular focus of this consultation paper is to understand the impediments to the delivery of good-quality limited advice,” the consultation paper said.
It also notes that as of 5 November, there were 21,284 current financial advisers on the Financial Adviser Register (FAR), being 14.6% below the long-term average prior to 1 January last year.
“This is the date on which many of the reforms in the Corporations Amendment (Professional Standards for Financial Advisers) Act 2017 commenced it said.
“Against the background, we are seeking to gather information to help ASIC understand issues relating to the supply of advice, and any impediments that industry participants face when providing good quality affordable personal advice. We are particularly interested in better understanding the issues or impediments that are within ASIC or industry’s control to act on. We want to help industry increase the availability of good quality affordable personal advice that meets consumers’ needs.”
The ASIC consultation paper said it had set out several areas of focus and asked a range of questions:
"We are seeking feedback on: (a) the problems associated with providing limited advice.
(b) the guidance and examples on limited advice that we have provided in Regulatory Guide 90 Example Statement of Advice: Scaled advice for a new client (RG 90) and Regulatory Guide 244 Giving information, general advice and scaled advice (RG 244);
(c) the terminology used to describe ‘limited advice’ (see Section B);
(d) the availability and affordability of personal advice;
(e) your experience with digital personal advice (also known as ‘robo-advice’ or ‘automated advice’) and whether this is a good way to provide good-quality limited advice; and
(f) other issues relating to the delivery of both affordable personal advice and limited advice.”
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