Speaking at an FSC policy briefing on the implementation of the Quality of Advice Review (QAR), abrdn Australia managing director Brett Jollie said that broadening the range of advice offerings would help close the advice gap, suggesting that banks could be part of the answer.
“There is a massive advice gap and that’s not going to change overnight,” Mr Jollie said.
“Certainly, it’s going to come through organic change, but I think broadening the base, for the super funds naturally, but I think it needs to be broader than that.
“What about non-super giving purely investment advice? I think there has to be a role for banks in this. Obviously, it has been controversial given where we have come from, but I think the guardrails have changed and I think there’s a role to be played there.”
He added that for clients that have basic needs, there need to be more options.
“There’s accountants and so forth, and we need to broaden the base for non-relevant providers to provide that simple advice, where it’s satisfying the simple, basic needs and if they become more complex, you refer them on,” Mr Jollie said.
Also speaking at the event, HUB24 managing director Andrew Alcock agreed.
“Why would we restrict that benefit based on legal structure where there are many other structures originally being used and we live in a society that promotes choice and ownership?” he said.
“There are other business models, where people might have a self-managed super fund, and then want simple help with asset allocation and they’re a trustee and they’ve got a responsibility. They could get that digitally through a different provider.”
Mr Alcock added that it comes down to having the right safeguards in place.
“In a different mindset, why would we want to preclude that and why do we want to lock people into a certain vehicle, then when they do want choice later on actually can’t get advice for that choice, and not doing that is going to create a bigger chasm,” he said.
“So, whilst I would welcome it in the short term, you’re still going to have a gap in the longer term. If we get the protections right, I think it shouldn’t be limited to a particular type or legal structure.”
Last week, digital advice platform Otivo said a scalable online solution is the “only way to fill the advice gap”.
“The advice industry, banks, and super funds have the opportunity to ensure more Australians have access to personal financial advice. All it takes is for an innovative leader to step up and give that access to their clients or members,” Otivo chief executive Paul Feeney said.
Jones not warming up to banks
However, on Tuesday, in his QAR response, Financial Services Minister Stephen Jones announced that he is not yet ready to welcome the banks into advice.
Instead, he said, the government will further examine the role for other institutions – banks and insurers – in providing more information and advice.
“In terms of priority, I believe it is more urgent that we fix the problems for financial advisers,” Mr Jones said. “And help the 5 million Australians, at or approaching retirement, get access to more retirement income advice”.
“I’m just not compelled that the same urgency exists in these other spaces.”
To read more about the government’s QAR response click here.
