Tax-style “high audit” system proposed for advice space
Financial advisers’ high regulatory burden is the product of a system that wrongly fails to distinguish “high risk” and “low risk” advice, an adviser believes.
Just as the tax system delineates higher risk players with a “high audit” status, so too should financial advice regulators, according to MEDIQ Financial managing director and AFA Rising Star Ravi Agarwal.
“The people who are providing advice 'low audit’ advice, things like making sure they have the right superannuation and insurances and they have a plan and are working towards financial goals shouldn’t have the onus placed on them to prove that they are not double gearing into a property fund,” he told Money Management.
Agarwal believes the failure to separate riskier financial activities from those offered by everyday advisers is damaging client/adviser relationships and the profession’s perception among the wider community.
He said anything involving complex exposure that is difficult to articulate to the client, such as derivatives, should be subject to rigorous regulatory guidelines, but retail advice should be subject to less scrutiny.
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
