On Monday, the peak body released a white paper which outlined a framework that could cut costs by almost $2,000 through recommendations that include raising the threshold under which clients are identified as retail clients with those with assets of less than $5 million, abolishing the safe harbour steps for complying with the best interests duty and removing “complex” SoAs in favour of a letter of advice.
On Thursday, FPA CEO Dante De Gori threw his support behind the proposal and said it must be acted on ahead of the government’s implantation of the Better Advice Bill next year which will expand the role of ASIC’s existing Financial Services and Credit Panel to operate as the single disciplinary body for financial advisers.
“With the government’s intention to introduce a single set of standards for the financial planning profession, we believe now is also the time to prioritise the establishment of a principles-based professional and ethical advice model, as opposed to the current ‘tick-a-box’ rules based approach to compliance under the existing regulatory framework,” Mr De Gori said.
“With these measures in place, the next crucial step to get right and ensure the success of the proposed single disciplinary model and a principles-based professional advice model is to create a true professional registration model, which is a key recommendation from the FPA’s Policy Platform.
“The creation of a personal obligation to register is an essential component of any professional framework and this is essential to achieving the outcomes the FPA and FSC have recommended in our respective policy visions.”
Submissions for feedback surrounding the Better Advice Bill’s draft exposure regulations close on Friday.
does the FPA even remotely care about advisers anymore? they are green bureaucrats who love regulation
if they work at any Hesta like business and your employer pays the membership in bulk they’ll care.
Do FPA members know that this whitepaper is actually about? (produced for FSC) [u]In short it’s recommendations is to replace them all with an online tool and robot advice provided by MLC and Hesta Super? [/u] Let me summarise this whitepaper for you….1) Advice is getting too expensive, needs to be more affordable- here’s the evidence… (Great concept…no concerns) 2) Let’s lift the definition of wholesale investor (sounds reasonable.. I guess)…3) Outcome Conclusion…therefore because of Point 1, (Advice is valuable, but too costly) let’s get rid of face to face advice, it’s too hard to reduce regulation so let’s just make it easier for Hesta to provide online calculators and lower the regulatory burdens for Hesta and AwareSuper.
FPA, FSC – too little too late.
Yes, in the USA, the threshold is $1Million. What we should do is allow investors to “opt out” of all of this so-called retail “protection”, if they wish. Tick a box & get a faster, cheaper loan & cheaper financial advice. Time to let the investors decide, rather than all the ASIC lawyers.
Exactly!!
The report ignores ongoing advice and estimates that AFTER the proposed reforms, the amount of time it takes to deliver personal advice will be 16.8 hours!!!!!! The recommendations are sensible, but are only a tiny fraction of what needs to be done to fix this disaster.
Another “great” idea by people who have no clue. Please tell me how increasing the parameters to capture more retail customers, people with $5million in assets, is going to assist in bringing down the cost of advice when you are exposing the advisor and therefore licensee to even more liability than they currently have with the $2.5M in assets.
it’s a bait and switch recommendation which ultimate recommends your human lead advice, be replaced by online tools, where it enables MLC/ AMP/ Hesta and AwareSuper delivering advice via a call centre.
So financial advisers will reduce their fees by $2000. Hell will freeze over before that happens.
@Billy – Why should they? Less competition, higher education & expertise levels + more need for advice. Why should anything important be cheap?
But hang on , isn’t taking steps to make advice ‘more affordable’ an issue advisers and associations are always banging on about?
Our advice is now perfectly affordable for the very wealthy. Robin advice will take care of the rest. You been sleeping or just working for ASIC Billy?
If the cost of producing advice dramatically falls:
* “basic” advice could be offered at a far lower price than it is now
* comprehensive advice will not necessarily be cheaper, but cutting red tape, might slow/halt the increase in price
* advice businesses might stay in business
* higher profits for businesses who can deliver advice efficiently – perhaps this will entice more new advisers to join the industry??