Three layers required to solve advice
There are three key layers needed to fix advice: regulatory reform, technology and subsidisation, according to the Financial Planners Association of Australia (FPA).
Speaking at the Financial Services Council (FSC) Future of Advice summit, Dante De Gori, FPA chief executive, said those three together could lead to greater enhancement in terms of delivering more advice to people.
“It may not make the price $500 and I’m not sure we should get there, but I think we need to look at those things,” De Gori said.
“I know there are steps taken that have been taken to try and reduce risks and this goes back to the point that there are regulatory costs that are too high, cumbersome and duplicated, so we should spend a lot of time trying to reduce that.”
De Gori said that some form of government subsidization would be necessary to help keep advice affordable.
“Where it works in the medical system, where everyone talks about that as a comparison, there is a supplement going on there in terms of the government subsidising some of that cost and this brings us to the discussion of how do we look at the tax deductibility of advice,” De Gori said.
The issue between “simple” and “complex” advice was also significant, as what constituted simple advice could still require depth of knowledge and training.
“There is still this issue that financial planners should still be paid for the work they do,” de Gori said.
“If you’re qualified, done the training, qualifications and you’re a professional – and you’re delivering simple advice, given it might reduce the amount of hours it might take – you’re still charging a higher rate per hour to deliver that advice.”
AUTHOR
Chris Dastoor
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
