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.”
Recommended for you
With HNW investors representing the largest market for alternative assets, Praemium and CoreData research underscores why this presents a compelling opportunity for advisers.
Having completed the successful integration of Diverger, Count has upgraded its forecast for expected synergy benefits achieved by the acquisition by a third.
Australia’s largest licensee has seen the biggest number of adviser losses over the past week, while the expected wave of new entrants has boosted overall adviser numbers.
Iress has increased its forecast adjusted EBITDA by $5 million for the 2023/24 financial year in light of the sale of its platform business to Praemium and hinted at a return to dividend payments.
