Three layers required to solve advice
There are three key layers needed to fix advice: regulatory reform, technology and subsidisation, according to the Financial Planners Association of Australia (FPA).
Speaking at the Financial Services Council (FSC) Future of Advice summit, Dante De Gori, FPA chief executive, said those three together could lead to greater enhancement in terms of delivering more advice to people.
“It may not make the price $500 and I’m not sure we should get there, but I think we need to look at those things,” De Gori said.
“I know there are steps taken that have been taken to try and reduce risks and this goes back to the point that there are regulatory costs that are too high, cumbersome and duplicated, so we should spend a lot of time trying to reduce that.”
De Gori said that some form of government subsidization would be necessary to help keep advice affordable.
“Where it works in the medical system, where everyone talks about that as a comparison, there is a supplement going on there in terms of the government subsidising some of that cost and this brings us to the discussion of how do we look at the tax deductibility of advice,” De Gori said.
The issue between “simple” and “complex” advice was also significant, as what constituted simple advice could still require depth of knowledge and training.
“There is still this issue that financial planners should still be paid for the work they do,” de Gori said.
“If you’re qualified, done the training, qualifications and you’re a professional – and you’re delivering simple advice, given it might reduce the amount of hours it might take – you’re still charging a higher rate per hour to deliver that advice.”
AUTHOR
Chris Dastoor
Recommended for you
BT is to launch a new low-cost “Focus” investment menu for its Panorama platform this October, in partnership with Vanguard, seeking to compete with industry superannuation funds.
Net gains of financial advisers have already doubled since the start of FY25, according to this week’s Padua Wealth Data, with momentum gathering pace far faster than the previous financial year.
National advice firm MiQ Private Wealth has appointed a new chief executive to lead the business through a “transformative era” after penning a partnership deal with AZ NGA earlier this month.
WT Financial’s managing director, Keith Cullen, believes the firm’s Hubco model with Merchant Wealth Partners will be a “repeatable growth model” for the business as it scales its adviser numbers.
