Cost-effective scaled advice will only be possible if the Government gets the policy and regulatory settings right, according to ANZ general manager for advice and distribution Paul Barrett.
The introduction of an overly prescriptive fiduciary duty for financial planners could prevent the majority of Australians who have never spoken with an adviser from receiving financial advice, he said.
"[We need to] create an environment where scaled advice can be provided that is efficient, totally in the best interest of consumers, but not weighed down by unnecessary paperwork," Barrett said.
While he acknowledged a genuine intent by the Government to address issues like scalability, Barrett said such issues needed to be considered in conjunction with the fiduciary duty.
When it came to business models, Barrett said modern financial planning practices have been moving to a fee-for-service model for a long time – and would have made the change with or without the Future of Financial Advice (FOFA) reforms.
"You only have to analyse the way commissions are charged via our product systems to be able to see that, by and large, most financial advisers are now dealing on some kind of adviser-service-fee basis or flat-fee basis," he said.
While he acknowledged that FOFA may have "accelerated things", Barrett felt that the opt-in requirement was "overkill" and "not in keeping with professionalism".
"It’s not a good thing that our planners are forced by regulation to have to enter into these arrangements – especially when you do have a fiduciary duty and a lot of conflicted payments have been removed," Barrett said.
