Advisers should “focus on where the money is” as current government-enforced obligations aren’t designed to support servicing less wealthy clients, according to a non-bank dealer group.
Speaking on a panel at the Association of Goals Based Advice national conference in Sydney yesterday, Sentry Group head of advice Daniel Parry said the compliance obligations imposed on advisers are impacting the way advisers and clients interact.
“20 per cent of time in Australia is spent on compliance, and a lot of that I think could go if the advisers were to focus on what they’re good at, and what quite frankly I’m sure they enjoy doing, which is talking to clients,” he said.
“I’m sure all of you have felt the impact of the fee disclosure statements (FDS) and the opt-in, and there needs to be a consistent contact between adviser and client to reinforce the benefit of the on-going fee, we’re sort of moving to a deeper relationship with fewer clients at the adviser level.”
Consequently, Mr Parry said, advisers will need to focus their attention on wealthier clients.
“The government doesn’t want us to deal with poor people, the government wants you to deal with the wealthy,” he said.
“It takes the same amount of time to do an FDS for a million-dollar portfolio as it does to do a $100,000 portfolio.”
Mr Parry said advisers should instead focus on where the wealth is and “let industry fund financial planning have the rest” of the market.
“Enzo Ferrari doesn’t think it’s a basic human right to drive one of his cars and I don’t think it’s a basic human right to get financial planning advice,” he said.
Several firms have been impacted by the corporate regulator’s action.
Super funds must now have a retirement income strategy in place.
Vanguard has called for a complete overhaul of the advice industry.
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