Bouris urges changed planner model

There may be increasing demand for financial advice, but that demand will not be met via the traditional financial advice model, according to the founder of Yellow Brick Road (YBR), Mark Bouris.

Commenting on the findings of recent Investment Trends research suggesting around 8.7 million Australians have unmet financial advice needs, Bouris said that increased consumer interest would not result in new customers through the traditional advice industry.

Further, he claimed there was no interest in change in the industry.

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"Eighty per cent of Australians don't have a financial plan because they see it as cost prohibitive and confusing. If the industry thinks these report findings will actually result in a significant uptick in people seeking financial advice, they're wrong," Bouris said. "The reality is that the same hurdles that stopped the vast majority of Australians from seeing a financial planner in the past remain today."

He said the only way to service the increase in the desire for advice was to innovate and deliver financial advice in way that was much more attractive.

Bouris, whose company has recently released an advice tool, pointed to the Investment Trends report having identified four times as many Australians preferring to receive lower-cost scaled advice compared to a higher-cost but more comprehensive alternative.

He said that was why YBR had launched its "challenger to the tired, old financial planning model this year".

"People don't want the unclear, expensive style of financial planning that's doled out to the wealthy," he said.

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I agree that simple advice is great, but how about reminding the Govt of this. Why does a $10,000 super fund needs a detailed SOA, fee & benefits comparison, insurance comparison and documented process. Does the advice want to do this? But the adviser must do this or fail their compliance, have restricted licence or worse lose the ability to be an adviser. The result, advisers won't (or better 'can't') deal with these enquiries.

This is all caused by the crazy requirements of FOFA. All that is needed is a best interest duty not reams of costly paperwork. Its all about TRUST. If advisers cant be trusted to act in favour of their clients they will soon be caught out under the best interests duty. Fees should be a matter between the client and the planner not for Government regulation. Let free enterprise reign.

Tim may I suggest further education could help Mr Bouris understand why advice is out of reach. A great course for anyone thinking of entering the industry or looking at sitting an annual advice exam is the Diploma of Financial Advice Acronyms Regulations Course, or commonly called Dip FAARC. It's covers off those process, procedures, documents that you didn't hand out or get signed. Such as PDS, AML, SoA, ROA, opt in, FDS, FSG, SPAM, Anti Hawking etc etc . Many dealer groups are starting to enroll advisers. If you fail to get one of those documents signed at your compliance audit you're immediately placed into Dip FAARK.

It must have been very disappointing for Mark to report to the board that his financial advice channel is making a loss and of course the answer is to throw out all that unnecessary client best interest stuff and then allow him to market his product as advice??
It is OK Mark you can still market your product as non-advised just don't pretend the consumer is getting advice. All product manufacturers can go direct to the public through their PDS and client can make their decisions on that - unfortunately yours is a bit expensive - so clients might not self select without a pretend adviser telling them what a good deal it is for them?
Of course if you want to actually take their personal circumstances into account, people get all crazy about 'know your client, know your product and appropriate strategy' which gets in the way of making a quick buck and moving on like the good old life agency days of the 80's.
Regulation can be removed as education standards increase not to appease the YBR profit expectations.

I couldn't agree more with Tim, wouldn't it be great if FOFA allowed us to be that simple. Just because you were good a flogging home loans does not in any way prove you have a good understanding of financial planning, just ask any veteran of financial planning with more than 20 years of good reliable comprehensive client advice. Easy to say flog a product Mark but I believe you are taking a simplistic view of a more complex problem. What is needed is simplified regulation and deductibility of adviser fees.

This sort of a comment "People don't want the unclear, expensive style of financial planning that's doled out to the wealthy," is really on the nose. Such self serving tripe. So wealthy clients are stupid and just pay whatever we ask them to for unclear advice that they don't understand? Really Mark surely you jest, don't sell clients short they are a lot smarter than you are giving them credit for! Old Bob where do we enrol for the Dip of Faaaark, majoring in more bloody paperwork ha ha ha good one.

A $10,000 super fund balance does not need a statement of advice. Its under the $15,000 limit in RG 175.147 (f)

I think Tim knows that, although thanks for raising an important point for others. You've highlighted just how dealer groups are not helping in keeping costs low. We need to move away from the Dealer Group model and give groups like the FPA and AFA more powers and $$ to enable indivdual firms to go it alone..Whether it's ridiculous procedures placed on advisers by dealer groups or it's legislation we've got compliance overkill. You're a man of legend Terry you can change things, we mere advisors, and or sales distribution agents are only scape goats for large institutions to be blamed when products or the puppet masters above fail.

Unfortunately the dealer compliance people seem to think that only relates to non-super investments, and make advisers do SOAs for every super recommendation of any amount especially if it involves a rollover recommendation. I'm under a large licensee. We are given no exemptions for advice under $15K. It's a control thing.

Thanks for the Compliance update Terry, but think you miss the point of the example. So let's all assume the super has $15,001 - happy now? Back to the real issues here, Gez is right, get your dealer group to give you an opinion on does this apply to investment or super. Better yet, get the Ombudsman view. Given that clients can have employer contributions directed to the super fund without adviser involvement means that the balance can easily exceed $15,000 and therefore an SOA would be 'best practice' and should be issued. Not my words, nor my dealer group, but provided to me by an adviser dealing with Ombudsman and Lawyers. Stupid - yes, real life example - yes.

It dosent need a SOA however it does require a ROA as per s946AA(4) and reg 7.7.08C, so there is still paperwork required.

...and you can't do an ROA unless you refer to an existing SOA. Pretty much trapped really. We really do need a massive overhaul of RG175.

the simple solution is for Mr Bouris to buy a chain of accounting firms... If you look closely at the Corps law, Under Section "We don't give advice", sub section, "it was the clients decision", paragraph "we've got really no idea anyway" clause "you'd be a mug not to do it, this is what I'd do.. but it's your choice & here's a Commsec application, rollover form and a SMSF deed" there is a special exemption from these consumer protection processes..

This is the thing old bob, you either want to be a adviser and be able to help people as per the law, or you don't. If you want to be an adviser and be able to give people advice don't be sneaky and try and get out of the paperwork that is required of you, if you want to sell products fine, but don't call it advice and don't pretend you give advice!

there is no requirement for an SOA on and investment less than $15k.

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