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
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
