Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
‘Let professionals be professionals’: The call ahead of Quality of Advice Review
Given the flood of changes and regulatory oversight that has resulted from the Royal Commission, it likely comes as a surprise to many that the impending Quality of Advice Review, was actually a recommendation of Commissioner Hayne. With submissions set to close on 3 June 2022, the Financial Planning Association, along with many others including the Association of Financial Advisers and Financial Services Council are ensuring their voices are heard.
With 83 questions to be covered ranging from the definition of ‘quality’ advice and how said advice can be made more accessible, there is hope that the FPA can “address complex problems that prevent consumers from accessing quality, affordable financial advice”. In fact, the FPA believes “it also has the potential to pave the way for regulatory reform to support a more sustainable advice ecosystem and enable financial planning businesses to better meet their clients’ diverse advice needs”.
The professional association has taken the opportunity to reiterate the five themes that have been central to their Policy Platform since 2020 and form the core of their submission. “
“Let professionals be professionals” the mandate begins, with the FPA reiterating that the education and ethical requirements mean that “we now have financial planners who are educated, skilled and guided by ethical principles”. The result is that many of the current regulations, are simply “giving them hoops to jump through that are no longer necessary”.
Regulatory certainty is also a key focus, something reiterated by Minister Hume, with the FPA noting that the legislative requirements have become confusing and show a “significant disconnect between what the law requires and what is actually happening during the advice process”. SOAs and their simplification is central to this.
The only hope for the sustainability of the profession is that planners are able to provide advice profitability and access the clients they are suited to helping. “The regulatory framework should provide flexibility for planners to provide advice in a way that makes it affordable for clients and returns a reasonable profit to their business” rather than a one size fits all approach.
Data has and will remain central to this, with the FPA highlighting other experts calls to provide the industry with access to both the ATO and Centrelink data along with an improvement in straight through processing. This leads to the final area of focus, being to allow advisers to provide advice that is fit for purpose for the client, rather than the very restrictive and specific licensing regime.
All advisers are being encouraged to have their say before closing on the 3rd of June 2022 amid hope that this may well represent a turning point for the industry.
