FOFA's true opportunity lies in scaled advice: John Brogden
Scaled advice is the most crucial part of the upcoming reforms in getting more Australians receiving financial advice in the near future, according to the Financial Services Council (FSC) chief John Brogden.
In a speech at netwealth's launch of Pathway Financial Services in Sydney last night, Brogden referred to one of the main objectives of the upcoming Future of Financial Advice (FOFA) regulatory changes.
"It would be an absolute tragedy if the industry went through this level of reform and fewer Australians ended up getting advice," Brogden said.
"The really exciting option lies - and this might not be regarded by small players as relevant, but it is - in scaled advice," he added.
Australian retail clients are currently offered either full comprehensive advice at one end, or intra-fund advice at the other.
"But in the middle - scaled advice - is a missed opportunity now for millions of Australians," Brogden said.
"They don't want to spend thousands of dollars, they don't have thousands of dollars to spend and they have a very simple proposition upon which they need advice."
Brogden conceded there was still significant regulatory clarity that needed to be provided, but said that servicing and accessing a large and untapped market with affordable advice was the outcome that "should and must arise out of these reforms".
"That's the way we reach millions of new people in our country and provide them with the advice they need," he added.
Pathway, which provides support services to those holding or wishing to apply for an Australian Financial Services Licence, was recently acquired from Paragem by platform provider netwealth.
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
