Financial advice to double after FOFA: ISN
The number of Australians receiving financial advice will double under Future of Financial Advice (FOFA) reforms while the number of advisers will remain stable, according to research commissioned by the Industry Super Network (ISN).
The report from Rice Warner actuaries also shows that incomes for financial planners will continue to rise under the reforms, the ISN stated.
This will be due to factors such as the continued growth of superannuation assets and increase in the superannuation guarantee, reduction in the cost of financial advice and the ageing population, according to the ISN.
There will be more than double the number of pieces of financial advice delivered in the 12 months from 1 June 2025 under the reforms compared to without the reforms, according to Rice Warner.
FOFA changes will result in 1.77 million pieces of financial advice being delivered in this period rather than 831,000 without the reforms, largely driven by a six-fold increase in the provision of scaled advice from 169,000 to 1.1 million pieces of advice, the ISN stated.
The weighted average cost of financial advice will also decrease 44 per cent from $2135 now to $1188 in 2026, and under a worst-case scenario adviser numbers would be decrease by as much as 5 per cent, according to the report.
Adviser incomes are also expected to grow strongly, from $182,000 per annum on average now to the equivalent of $260,000 in today's dollars in 2026, the ISN stated.
ISN chief policy adviser Matt Linden said the research provides a useful counterweight to the alarmist claims being made by the financial planning industry.
"The Rice Warner report is the only credible research conducted to date that investigates the impact of these reforms on the financial services industry and consumers," he said.
"Based on sound methodology, the report clearly demonstrates consumers and the industry will benefit from these reforms. In fact, all the indicators point to a vibrant and innovative financial services industry in future, which will be driven in part by compulsory superannuation. The expected large increase in scalable advice will also produce new business opportunities."
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
