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Retail advice sector lags industry funds in low-cost advice

Industry super funds have been the frontrunners in terms of delivering targeted, low-cost advice to consumers, according to Mercer’s financial advice leader Jo-Anne Bloch.

The former chief executive of the Financial Planning Association told an Industry Super Network Symposium on financial advice in super that the regulatory environment since the Financial Services Reform Act almost 10 years ago had focused too much on ‘one size fits all’ advice.

Ms Bloch said the best aspect of Future of Financial Advice changes, aside from the crackdown on commissions and volume bonuses and implementing a best interests duty, was that it enabled the industry to provide targeted advice without having to deal with a ‘one size fits all’ approach.

So far the retail sector “has delivered high end, complex advice to people who have wanted simple, straightforward questions answered,” she said.

But the industry fund movement has narrowed that gap, delivering low cost, simple, demand driven advice. “And I think the gap will close in terms of which sector provides what sort of advice,” she said.

“I think this is the really exciting part of FOFA. Getting out and giving people the right advice for the right fee from the right person with the right regulatory framework.”