Will QOA see banks re-enter advice field?
The Quality of Advice Review could see banks re-enter the advice market.
Wealth Data research had been tracking the weekly figures and found almost 300 advisers left the industry last week which caused the industry total to fall below 16,000 for the first time.
Speaking to Money Management, Colin Williams, founder of Wealth Data, said he expected the exodus of advisers in recent years meant banks and super funds could find a place again.
The Quality of Advice Review’s proposals paper had noted the current regime, which regulated the conduct of the adviser rather than the content of the advice, was poorly-suited to superannuation and banks.
“The regime is poorly suited to financial institutions (banks, insurers and superannuation funds) that may want to and may be asked to give personal advice to customers. As a consequence, financial institutions are reluctant to give their customers helpful personal advice and avoid using information they have about their customers when they are asked for advice.”
Later on in its recommendations, it said: “An obligation to give good advice should make it easier for banks, insurers and superannuation fund trustees to give simple advice to their customers. This is because there would be no prescribed process and because the advice could be provided by a staff member who is not a relevant provider”.
Super funds, in particular, had held up best over the past 12 months when it came to adviser exits with a net loss of 8.8% compared to losses of 57% by the Accounting-Limited Advice sector over the same period.
Williams said: “The Quality of Advice Review will make it much easier for super funds to give advice and for banks as well. It was hard for them to remain after fee for no service but if they are now able to offer a basic type of advice and make money from that then why not?
“If they don’t have to tick so many boxes anymore, then there’s lots of different ways to clip a ticket, and it could be an option for them to get back in.”
This was echoed by Bravura in its review submission: “The proposed reforms may encourage banks, superannuation funds, other financial product providers and new entrants to enter (or re-enter) advice. This will increase opportunity for Australians to access advice.
“If the proposed reforms pass, superannuation funds, banks, other financial product providers and new entrants have an opportunity to become key players in the provision of financial advice. This will only work if these organisations have confidence that they can invest in and manage the risks inherent in providing personal advice.”
AUTHOR
Laura Dew
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Well isn't that good news? I think a famous dictator once said: "if the lie is big enough people will believe it". The very institutions that successfully pawned their crimes off as "a failure of advice" will now return with staff giving advice with less training probably than the old RG146 courses. Sadly Duke has this sinking feeling that any relief these organisations will get on providing advice won't pass on to us. Watch our ASIC levy go up.
Disgusting what has happened to our country. Just one more example.