Pro bono work needed to reduce advice gap

Financial advisers should spend time doing pro bono work with underprivileged citizens as part of their continuing professional development (CPD) in a bid to reduce the advice gap.

Speaking to Money Management, ANZ financial adviser, Steve Donald, said the lack of support available for people in lower socioeconomic classes was a real problem that the Government needed to improve.

Changes such as making financial advice tax-deductible would have a positive effect on the economy in the long-term by reducing the Age Pension costs.

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“There needs to be improved public services dealing with people in lower socioeconomic classes on establishing what they can afford to do. Websites like Moneysmart are great but they aren’t well-known enough and that should be something the Government focuses on,” he said.

“Could advice be subsided for people who are on benefits? Could advice fees for ongoing and upfront advice be tax-deductible? Small changes like this could be huge for the Age Pension.

“The people who need advice are the people who are unable to get it so what can we do about this? How about making people on their professional year spend some time giving general advice to people in need? Or it should be part of advisers’ CPD to spend one day a year providing a pro bono service. This would give out a positive message and help the community.”

Small changes he said people could make would be regularly investing $20 in their superannuation.

“Superannuation is not understood and people worry about being unable to access it but there is nothing more tax-efficient than super, even at the lower end,” he said.

“If you can find $20 for super then the ATO [Australian Taxation Office] will make a co-contribution. This is the type of thing that is not widely understood and doing small things now will help build wealth for later.”

 




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Hi Laura, I have been in the industry for over 20 years and I would do not just one day a year of pro-bono work but one day a month or even more if only pro bono work was exempt from all the compliance and rigmarole that you generally have to go through to put the advice together. Let the lower socio-economic groups be treated as the w'sale clients for compliance purposes and I am sure there would be a lot more advisers volunteering pro bono work.

Pro bono work commercially represents enhanced risk. Centrelink already provides a free financial planning service, albeit without product recommendations.

Why would a responsible business owner with multiple staff and family mouths to feed, open themselves up to the possibility that they could face ASIC or AFCA issues for advice with a dubious application of PI cover to protect them?

There is only one reason to be in business; to enhance the wealth and security of your own family. Otherwise you should be a charity or working for someone else.

The gov and a blind corrupt regulator created this social issue, there is zero reason we should assist or bail them out when they already have Centrelink to provide this to the public.

This still makes me angry from last year.... Professional organisations asked them to withdraw it. Nonetheless it remains on their website.

https://www.choice.com.au/about-us/media-releases/2020/april/early-acces...

"If people are in financial difficulty, we encourage them to contact financial counsellors, not financial advisers. Financial counsellors offer a free and independent service. They can help people navigate through financial hardship, access government payments, and assist with any debt matters."

"It will only be in very rare circumstances that a financial adviser recommending early access of superannuation is doing so in your best interests."

https://www.moneymanagement.com.au/news/financial-planning/afa-insists-c...

How about......NO. Article obviously written by a non-business owner. You can sued just the same on a probono as you can on a million $ client. Besides apparently they can get their free advice on Tik Tok.

And they'll probably get legal aid (paid for with your taxes) to help them sue you when they claim they didn't understand the long document that you were legally obliged to provide them.
Pro bono might be a wonderful theory, but it's not going to come from small self employed planners who are desperately trying to make a living.

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