Former Financial Services Council chief executive, John Brogden, has stated his “greatest concerns have been realised” around accessibility of financial advice.
In an open letter, Brogden, who was FSC CEO from 2009-2015 and was now a trustee with CFS, reminisced on the Future of Financial Advice (FOFA) reforms a decade ago.
“I argued at the time that while the reforms would do good, they would make financial advice more expensive, less accessible and exclude Australians who most need advice from getting it.”
“10 years after the FoFA reforms, my greatest concerns have been realised.”
This included a halving of Australians who receive financial advice, a drop in advisers to around 15,000 and the cost of advice rising to $4,000.
Referencing the subsequent Quality of Advice Review, which was due to present its report any day now, he said this was a chance for the Government to improve the dire situation.
“This Government has a chance to get the balance right. To preserve the uplift in quality advice and consumer protections that has been achieved and create regulatory conditions to ensure millions of Australians can access the affordable financial advice they need.
“A clearer focus on the outcome of any advice rather than the inputs would allow for numerous requirements to be reconsidered and just as importantly for advice to be scaled to meet different customer needs.
“Focusing on the quality of the advice rather than the prescriptive process by which it is arrived would also allow greater flexibility in the way advice is provided, be it face to face, phone or online/digital.”
He cited his hopes for bold changes to achieve the stated desired outcomes and to achieve meaningful reform, stating he was encouraged that a bipartisan approach taken by Government was possible.
“My caution to policymakers is that tinkering at the edges will not achieve the desired outcomes.
“Minor ‘housekeeping’ to streamline fee disclosure requirements or to iron-out peripheral obligations like the design and distribution obligations will address some administrative pain points but they will not make a meaningful difference to the cost of advice.
“I am encouraged that a bipartisan approach in this area is possible, potentially increasing the likelihood of meaningful reform.”
