AFA chief executive Philip Kewin has said he believes financial advisers are “the most adaptable professionals”, who will be able to work through the changes in legislation without necessarily having to charge clients more money for their services.
In the latest episode of The ifa Show, Mr Kewin said there is a risk the cost of advice may increase thanks to changes in the Life Insurance Framework and new education standard reforms.
“You’ve got mandated remuneration levels but you’ve also got an increase in compliance costs and responsibilities,” he said.
“It does say to you that potentially that is going to increase the price of delivering advice to customers.”
However, Mr Kewin believes advisers are “the most adaptable professionals I have ever seen”, and that efficiency can play a big part in the transition.
“We are going to have to be more efficient. There is no doubt about it. With those additional responsibilities and commission caps – certainly for life insurance –we’re going to have to find ways to fund it," he said.
“I wouldn’t like to think that middle Australia would miss out on advice because it’s too expensive. I like to think that we can adapt, and ensure that we have a model that can deliver great advice to a good many people, not just high-net-worth.”
When asked whether the AFA will push to have some of the other red tape measures reduced, Mr Kewin said this is still being formulated.
“One of things that I made sure in my early discussions with the board is the fact that what we need to do is make sure we identify what areas we are going to fight, what areas we are doing to participate in, what areas we are going to say, ‘look, that’s done. We can’t do anything about it’,” he said.
“That’s something we will be formulating over the coming weeks.”
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