Practice development overshadowed by regulatory ‘noise’
Regulatory “noise” is the biggest challenge to business growth in the advice industry and statements of advice (SoA) are the most burdensome compliance regime, according to a panel of advisers.
Speaking at the Money Management practice management webinar, Jill Tunkin, Lifespan Financial Planning national practice consultant, said practice development and management was being overshadowed by compliance and noise.
“There’s a lot of regulatory change in the industry and that creating a lot of noise coming through which is easy to allow you to lose sight of practice management and the benefits it can provide,” Tunkin said.
“Licensees are more focused on regulation chaos rather than growing and developing their business; tech seems to be a real trial and error exercise and advisers are left to solve these issues themselves.”
Tunkin said the SoA was the most burdensome compliance regime – and there was no shortage of competition for that title.
“If you just look at what’s on the table at the moment with regulation change – you’ve got opt-in, ongoing fee arrangements, fee disclosure statements (FDS), fixed-term agreements, consent, breach reporting and DDO [design and distribution obligation] requirements – so that’s just a list of what’s on an adviser’s plate at the moment and that’s creating a lot of fatigue,” Tunkin said.
“At the end of the day, all those burdens seem to fall on the planner – the advisers need to work through the changes, they need to understand them and how it flows through the value chain in their practice.”
Tracey Sofra, Sofcorp Wealth Financial Advisors principal and financial adviser, agreed that producing an SoA and making sure it was good from start to end was burdensome.
“The burden of the opt-in and FDS has just been an absolute nightmare aligning dates with reviews,” Sofra said.
“We are spending so much time trying to align dates to make sure we are compliant with FDS and opt-ins.
“From that point of view, it’s extremely frustrating and you wonder what the hell we’re doing in the industry.”
When it came to tech being a solution, Tunkin said she fielded queries on a daily basis that asked about technology options, but these were generally all assessed by way of cost.
“When you’re in a practice and you have margin pressure – which would describe the current environment – there’s always that tendency to work through the tangible which is that cost rather than the measure of value,” Tunkin said.
AUTHOR
Chris Dastoor
Recommended for you
ASIC has banned a Queensland adviser from providing financial services for five years after failing to provide appropriate advice that was in the best interest of his clients.
Minister for Financial Services, Stephen Jones, has said it is not a “backdoor attempt” by the government to allow the new class of adviser to provide full advice.
The financial advice industry has seen a net loss after 10 consecutive weeks of net growth in adviser numbers, according to Wealth Data.
Only 11 per cent of financial advice practices have said they are including crypto products on their approved products lists, according to CoreData.
