Qualified advisers ‘doesn’t have to be an us and them’

Speaking on a recent episode of the ifa Show, adviser Nathan Fradley said the new class of advisers that will be introduced by the Quality of Advice Review (QAR) reforms could be an opportunity for the industry, rather than a threat.

“It could be a really positive thing to get people into an industry which now has a very high bar to enter, and enable them to get some experience,” Fradley said.

“There’s a huge opportunity in this. It’s not an us and them, or it doesn’t have to be an us and them.”

He noted that the lower benchmark for entry could bring more professionals into the industry and they could be built up to provide higher standard advice down the line.

“They can then help service those clients to a lower threshold, identify the opportunities where that person needs more comprehensive advice, but then allow them to build the skill sets within those roles to progress upwards as well,” Fradley said.

“How many advisers out there started off working at banks or large financial institutions, giving really narrow or scoped advice, who were then able to build the confidence and the skill set to do more complex things?

“I think this role gives large practices the ability to hire people at a lower benchmark in terms of qualifications, ironically, but the PR around it is shocking. It’s never delivered well.”

Determined to see the bright side to the massive shift in the financial services industry in recent years, Fradley said the quality of advice in Australia has improved significantly due to changes that have been made.

“The quality of advice in the last couple of years has increased exponentially. The connection with people. We’re world leading when it comes to the kind of advice we give. If you look at other countries, they’re still stuck back 20 years ago,” he said.

“And so if we look at that, the better we do, the more strength we have to start pushing back on further regulation as opposed to just self-regulation. And when we do that, then we’re in control of that a lot more. But I might be being optimistic.”

Speaking on the fears expressed by some industry members that increased regulation and the introduction of the new class of adviser by the government is part of an effort to push advisers out altogether, Fradley said he understands where these fears are coming from.

“The question that comes about is, you bring in this new tier of adviser, are the same costs put on them or is this a different playing field? I can understand where that fear would come from, that it’s like we’ve got this new type of adviser,” he said.

“If you keep getting pricked by little things all the time, of course you’re anticipating the next thing that comes lobbed to you to be a prick in the shoulder or something. I completely understand why people would feel that way.”

Fradley added that it can feel as though the financial industry can be treated like a political pawn by those in government.

“Sometimes it does feel like we can be a bit of a political plaything, which is, it’s easy to move,” Fradley said.

“It doesn’t take much effort to do something in financial advice and be able to say you’ve done something great, or at least just taken any action at all, whereas a lot of other industries are a lot larger and harder to move.”