ISN/Rice Warner study highlights need for independent research
The latest Industry Super Network (ISN)-commissioned research conducted by Rice Warner highlights the need for the Government to commission independent analysis, according to both the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA).
While not specifically questioning Rice Warner's findings that the Future of Financial Advice (FOFA) reforms would have a minimal effect on financial planner job numbers, FPA general manager of policy and government relations Dante De Gori said those questions will continue to be asked so long as the research is commissioned by a stakeholder with a vested interest in one side of the outcome.
Independent research would put an end to questions of potential bias, otherwise you will always get people doubting the research, he said.
AFA chief executive Richard Klipin said some of the information may be unreliable, as it is being provided by organisations that are not in the business of providing financial advice.
"In many cases, they are coming up with spurious or alleged outcomes without a deep knowledge of how the market works," he said.
The ISN press release relates the finding from the study that there will be almost double the number of individual pieces of financial advice delivered in the 12 months from 1 June 2025 under the FOFA reforms, compared to the situation if the reforms are not introduced - much of this due to an increase in the provision of scaled or single issue advice.
The ISN release also points out that Rice Warner finds financial adviser incomes will grow and the cost of advice will decrease.
One point contained in the research that is not mentioned within the ISN press release is that "the growth in single issue financial advice will come from two main sources, namely industry super funds members and bank customers" - further increasing the stake of industry funds and major institutions.
According to Klipin, these numbers - as concerning as they are - show there will be a greater concentration within the marketplace within the major providers and industry funds at the expense of the independent sector.
"This is a poor outcome for consumers, who will continue to lose access to trusted personal advice," he said.
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