Senior financial planning executives have questioned whether scoped advice will be able to be realistically provided in a current retail advice environment.
Speaking on a panel session at last week’s Financial Services Council conference, Centrepoint Alliance chief executive John de Zwart said while he expects there will be an increase in scaled advice and a decrease in the proportion of full advice, it will be hard to service clients under the new regime at an effective price.
Count Financial chief executive David Lane added that “practically, you just wonder if it works.”
“After you’ve gone through a financial needs analysis to figure out if you can scope it it isn’t much more work to give actual holistic advice. You ask yourself the question, can you really do it at a better price point than what currently exists?” Mr Lane said.
Herbert Smith Freehills partner Michael Vrisakis suggested the regulatory piece may also make it difficult to provide scoped advice.
The legislation as it currently stands has “inbuilt reticence” in terms of allowing an adviser and to fully agree to the scope of advice, he said.
“Until we can solve that ambiguity around how far you can go to get scoped and scaled advice we’re going to continue to have this problem [with] advisers and dealer groups not knowing how far you can go in terms of trying to scale that advice to provide accessible affordable advice,” he said.
Perpetual chief executive Geoff Lloyd he was hopeful technology would come to provide an answer in terms of cost.
But he added that “unless we can ring fence that liability, we’re not going to make any progress.”
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