FSC whitepaper ‘giant leap forward’ for advice: TAA

The efforts by the Financial Services Council (FSC) to reduce advice costs have been praised a “positive step in the right direction” by The Advisers Association (TAA).

The FSC released its ‘White Paper on Financial Advice’ this week which it said was a blueprint for a simplified regulatory framework that could reduce the cost of providing financial advice and allow advisers to spend more time with new and existing clients.

TAA chief executive, Neil Macdonald, praised the separation between product and advice and between advice and general information which would be a “giant leap forward” and meant advice could only be given by licensed financial advisers.

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“This would help consumers better understand when they are being given financial advice and when they are merely being supplied with general information by a product provider, for example,” Macdonald said.

“The cost of providing financial advice, the onerous review requirements and the application of black letter law in relation to fee disclosure statements has made the delivery of advice too unwieldy and far too expensive. We can and we should do better than this.” 

While he praised the blueprint in its current form, he said he was also keen to see it refined in the future to include clients receiving ongoing advice.

“This current version is mainly focussed on new clients, and not as much on the ongoing advice and services provided to existing clients to help them manage their relationship with money, give them real choices and achieve the life they want to live,” Macdonald said.

“While there is certainly more work to do, with genuine collaboration, and a focus on client and consumer outcomes, we are confident that the financial advice industry has a brighter future.”

The blueprint had previously been praised by the Financial Planning Association of Australia (FPA) who said the FSC had picked up on the concerns of FPA members.

“We commend the FSC on listening to the concerns of the FPA in relation to a number of their proposals which would have added substantial cost and complexity to the delivery of affordable advice to Australian consumers,” Dante De Gori, FPA chief executive, said.

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Interesting that the AMP advisers association has changed their name to expunge any mention of "AMP" from it.

Frankly the whole of AMP should follow suit and totally rebrand. In spite of all their bad publicity, AMP does actually have some good products. But their brand name has become so toxic, clients have a strong aversion to it.

Yet again the adviser associations get lulled into a feeling of good will with the FSC, only for the FSC to turn it on them later in a strategic sense - they will never learn you can't trust the product providers - why they even need to comment on their policy on advice is beyond me.

Beware of anything proposed by the FSC. This is the group that bought you LIF based on totally spurious claims & no valid statistical evidence. The FSC promotes the goals of the big end of town & has a history of actively seeking to eradicate Financial Advisers, or at least small business advisers.

How quickly we all forget. I'm reminded of the FSC CEO Sally Loane' testimony at the Banking Royal Commission. Before anyone feels the need to comment on the merits or otherwise of the FSC's recent advice white paper, familiarise yourself with the train wreck and quite frankly disgraceful and inept responses to questioning from Senior Counsel Assisting, Rowena Orr QC and then have another go. I also remind readers that the FSC promotes its own Code of Ethics and Code of Conduct yet failed to condemn, banish or punish any former or existing member found out by the RC. Anyone who thinks that the FSC should be formulating policy or indeed have any influence on the advice industry at all is in need of some serious therapy.

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