As the 2022–23 financial year has come to a close, advisers and licensees alike are actively seeking ways to stay ahead of the upcoming industry-altering changes likely to result from the Quality of Advice Review (QAR), the recent ASIC levy hike, and the enactment of the experience pathway.
According to two advisers, licensees that persist with a “business as usual” mindset will miss out on the opportunities offered by the evolving advice landscape in the months to come.
Glen Hare, co-founder and adviser at Fox & Hare, told ifa that licensees have a responsibility to stay responsive to the needs of their staff and clientele.
“Any legislation that does come through, the licensee needs to unpack, deliberate, and provide guidance to advisers for,” Mr Hare said.
“I’m not sure the changes of the QAR will have a huge impact on adviser numbers, but it may impact the number of advisers that are shuffling between licensees if one licensee was quick to adopt those changes and provide guidance over another.”
He expressed hope that, on the other side of the QAR, the adviser exodus that has been one of the greatest challenges to advice in recent years, will subside.
“I’m of the view that, given all the changes that the industry has gone through over the last five to 10 years, I almost feel like you are either in and committed to the industry or you’ve already left,” Mr Hare said.
“Because we have been through so much change, current stakeholders within the industry are very familiar with that change. So, yes there are going to be changes because of the QAR and ASIC levy, but I think those that remain in the industry are committed to the industry.”
My Money Buddy and The Savings Squad podcast founder, Adele Martin, pointed out that during the QAR’s drafting process, advisers were hopeful that it would be “the relief they needed”.
“Given there is more consulting to be done to get statements of advice (SOA) relief, I don’t think this is going to be anytime soon,” Ms Martin told ifa.
The pent-up frustration, she opined, could see advisers begin to question their licensees, and the value of the services they provide.
“It’s going to force a lot of business owners to look at their growth strategy — especially those with an older client base,” Ms Martin said.
“If they are not growing and adding new clients, then the additional expenses are just going to see them go further backwards … they might start to question if it’s worth it,” she warned.
QAR to allow licensees to do better
Last month, Eugene Ardino, chief executive officer at Lifespan Financial Planning, issued a plea to advisers regarding the hype he believes has surrounded licensees since certain recommendations of the QAR became public.
Namely, since QAR lead Michelle Levy suggested the removal of statements of advice in her final report released by the government in February, advisers have openly expressed worry that licensees could continue to ask for complex and lengthy SOAs regardless of the government’s decision, among other things.
But Mr Ardino believes it is “highly unlikely” that licensees will try to justify their existence by conservatively interpreting new regulations and placing an extra burden on advisers — a conjecture, he said, that has been floated recently.
His opinion is that licensees have, over the years, evolved towards more of a service provider proposition, despite the resource-heavy supervisory obligations currently in place.
If anything, Ms Ardino said, the QAR reforms “could take the shackles off us”, enabling licensees to place greater focus on supporting advisers in growing their businesses, rather than supervising an unwieldy advice process.
