The chief executive of the Financial Planning Association (FPA), Jo-Anne Bloch, used an address to the Conference of Major Superannuation Funds (CMSF) on the Gold Coast to call for a united approach between planners and industry funds on the delivery of quality advice to consumers.
Speaking just days after Industry Funds spokesman Garry Weaven used the conference to reinforce his calls for legislation imposing an obligation on planners to provide advice in the best interests of clients, Bloch said it was time to recognise how heavily regulated the financial advice industry was.
“Recognising that the advice industry is heavily regulated, shouldn’t we embrace the fact that there are different ways to deliver advice,” she said.
“As long as there is tough regulation and as long as there is full disclosure and transparency, consumers should be able to choose whether they need advice, whether they want advice relating to a product only, or whether they want more complex advice, which might include a whole lot more than super.”
Bloch said a heavily regulated model should be capable of overcoming arguments about fees and commissions, and the real debate should now be about the delivery of advice across the industry to those who need and want it.
She said the Federal Government’s Financial Services Reform regime was working, while the FPA’s codes on soft dollars, rebates and conflicts of interest principles were effective.
“As long as there is tough regulation and as long as there is full disclosure and transparency, consumers should be able to choose whether they need advice, whether they want advice relating to a product only, or whether they want more complex advice, which might include much more than super,” Bloch said.
“Fees and commissions should feature in that choice, but not at the expense of getting advice altogether,” she said.
The chief executive of the Investment and Financial Services Association, Richard Gilbert, told CMSF delegates that Australia was confronting a supply crisis in terms of delivering advice.
“What we have in Australia is a surging demand for advice which is outpacing supply,” he said.
Like Bloch, Gilbert said the industry at large and the regulator, the Australian Securitiesand Investments Commission, needed to collaborate quickly to come up with solutions that would boost both adviser numbers and output.
“But we have continual calls to increase compliance and actually raise the quality bar,” he said. “If these calls are heeded, the shortage will become even more apparent.”
Gilbert said there were currently around 16,000 full-time equivalent planners in Australia and that the larger dealer groups were experiencing net growth of about 10 per cent in terms of planner numbers.
However, he said his contacts in the major dealer groups were repeatedly revealing that they needed more planners than were available.
Gilbert said the current recruitment bonanza would probably lead to spiralling remuneration whether via salary, flat fees, profit shares, bonuses or trails.
