A new study has revealed that each week financial advisers are losing a day’s worth of valuable face-to-face time with clients to compliance.
The Wealth Insights survey of more than 890 advisers found, on average, that advisers spend 18 per cent of their time on compliance, which does not include plan preparation, plan implementation and other administration.
It is of little surprise then that 74 per cent of advisers cite compliance as their biggest concern, followed by a related worry of not having enough time to provide quality service and advice to clients.
The study showed that only 35 per cent of an adviser’s time is spent meeting with clients or reviewing client portfolios.
Wealth Insights managing director Vanessa McMahon said the level of frustration advisers experienced under the current regime remained unchanged from when Financial Services Reform was first introduced.
“Their frustrations are compounded because of a lack of clarity around black letter law interpretations, and the intent of the law has not yet been achieved,” she said.
“Advisers’ frustrations are compounded when there isn’t anything really definitive that explains exactly what they have to do to be in full compliance of the law.”
The survey’s revelations highlight the importance of the work conducted by the Investment and Financial Services Association (IFSA) and the Financial Planning Association (FPA) in lobbying the Government to cut red tape.
According to IFSA chief executive Richard Gilbert, Australian financial services compliance costs as much as 10 to 15 per cent of total operating costs.
Earlier this month, FPA chief executive Jo-Anne Bloch said by cutting the red tape surrounding an adviser’s disclosure and compliance obligations, financial advice would become more accessible and affordable for Australians.
She said that rather than seeking a total overhaul of the Financial Services Reform regime, the FPA was calling for policy changes, such as definition updates to the terms ‘general’ and ‘personal’ advice within Corporations Law.
The FPA would also like to see the removal of the current criminal sanctions on financial planners for failing to provide clients with a Statement of Advice or Financial Services Guide within five days of giving advice.