Neil Macdonald, chief executive of peak body for AMP financial planners The Adviser Association, said the latest guidance released by the authority appeared to narrow the scope of personal advice even further, meaning everyday consumers would be restricted to only being able to access simple advice types that fell outside the code.
“Given that the broader intent of the code is to meet the expectations of ‘the Australian community’ for the provision of professional financial advice, the focus within it on financial advice clients is too narrow and should be extended to include people who are not clients,” Mr Macdonald said.
“Is the focus on clients supporting a view that only intra-fund or robo-advice should be available to everyday Australians, or is it an acceptance of defeat that professional advice is out of reach and not available to everyday Australians? Either way a narrow scope limits the utility and time frame for this draft.”
In its submission to the authority around the guidance document, The Adviser Association said while FASEA had clarified the delivery of scaled advice was acceptable under the code, this appeared to be at odds with several of the standards that underlined a broader, holistic picture all advice needed to take account of.
“Acting with integrity and in a client’s best interest, should not be in conflict with giving simple or straightforward advice simply,” the association said.
“However, the combination of FASEA, legislation, regulation, licensee policies and processes (related to considering broader, long-term interests and likely future circumstances) has meant that despite the stated intent of being able to scope advice, it has become too hard, as it is too expensive and too risky to provide.
“This needs to be addressed as there is a fundamental disconnect between what consumers need and want, the difference between low risk product advice for the client e.g. a decision can easily be changed the next year, and the more complex or ongoing services a planner provides to clients where the initial advice is out of date the following day and is only part of the services and solutions offered to their client (i.e. annual reviews to keep them on track).”
The association also criticised the inclusion of intra-fund advice in guidance around Standard 6, stating that such advice should not be included in the same category as other limited scope advice because it was “information about a product, not professional advice”.
“If product provider staff are allowed to continue calling themselves advisers, this will continue to confuse consumers and muddy the waters on the journey to being an advice profession,” the association said.
When the government said they wanted to help the industry you know it’s time to get out. They have destroyed the business and the hopes and dreams of those that work in it.
I know quite a number of advisers simply living off insurance renewals and looking after existing clients as best they can. They have not written new business in years. It is simply too risky to do so with these rampant bureaucrats and other non-sensical clowns who don’t live in the real world changing the goal posts every quarter. The compliance risk is too great to be involved in writing new business now – insurance OR financial planning/investments. Too sad for words for our once great industry.
I looked at my dogs breakfast this morning…you know it really makes sense to me now 😉
Good stuff Neil. Well done.
“information about a product, not professional advice”
Ding Ding Ding! Winner winner, chicken dinner.
It would seem the major disconnect is between FASEA and Financial Advice (Advisers, Consumers/Clients). They clearly have no experience or knowledge of what Advisers do, nor how they do it; in what clients want and what they don’t. This is what happens when you create a body made up primarily of those who benefit directly and financially from overcomplication, over-regulation, and over-education when the education is pure theory with no real world applications.
Well said!
All of the above is obvious. I do not understand why the law makers cannot see this and do something about it. A disgrace really.