Senator Jane Hume has confirmed that financial advice is being viewed as a profession rather than a sales role and that the industry has adjusted to recent changes.
In an interview with Stockspot chief executive and founder, Chris Brycki, Hume, who was minister for financial services, superannuation and the digital economy, said it had been an “uncomfortable shift” for many in the industry since the Royal Commission.
“In the last 20 years, we have seen a massive shift from being a sales job to being a proper profession where the interest of the client comes before the interest of the adviser. That’s been an uncomfortable shift for a lot of people.
“So we knew there would be some people who didn’t want to come on that journey but I think the worst is over and the industry is settled.”
Earlier this month, Financial Services Council chief executive, Blake Briggs, said he felt the advice industry should be viewed as a profession and treated with a lighter touch regulatory regime.
She highlighted the changes had led to other benefits such as higher returns and lower product costs but this had been countered by the higher advice costs.
“This means financial advisers have to demonstrate the value they offer to their clients and sometimes that can be an uncomfortable call but it’s an important conversation because we know that advised clients tend to make better decisions especially in periods of volatility.”
Hume also said digital advice could play a role in closing the advice gap and work alongside traditional face-to-face advice for people with fewer financial needs.
“Not everybody needs a full financial plan on day one, sometimes they just need bite-sized pieces of advice and certainly digital advice can fill that void.
“Digital solutions can reduce the compliance burden for traditional advisers, that reduces the cost of a financial plan.
“It’s about making sure more people have access to advice, it’s not about eating into traditional advisers’ client base, it’s about making sure clients of traditional advice have access to cheaper advice.”