Objectives forefront of advice process
Genuine advice is when planners nudge investors toward the financial and lifestyle changes they require to reach their goals, Milliman believes.
An analysis by Milliman principal and senior consultant, Wade Matterson, and senior consultant, Craig McCulloch, said while risk profiles provided a paper trail that, at least superficially, satisfied businesses' compliance requirements, it had little to do with an investor achieving their goals.
"Arguable, this is the key service that financial advice is supposed to deliver," it said.
Milliman said when risk capacity was introduced as a measure it brought an entirely different focus to the advice.
"A product is just one potential component of a broader, holistic strategy, which is directly tied to an investor's personal goals, not just levels of personal comfort," the analysis said.
"It also introduces a level of tension where real advice — and difficult discussions — begin."
The analysis noted that there was a shift in advice that was moving client objectives to the forefront of the advice process rather than building advice on compliance-driven measures, aimed at minimising internal business risk.
The analysis said fewer Australians felt strong confidence in their ability to achieve their financial life goals, and that only 23 per cent turned to a financial planner, and 70 per cent did not know who to trust.
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
