While regulators and the government are finally waking up to the value of financial advice, fears of punitive action by ASIC are hurting accessibility and affordability.
There could be light at the end of the tunnel for advisers as a number of industry figures note that COVID-19 has led to a fundamental rethink of the value of advice in Australia.
“COVID-19 has caused huge economic disruption, but there’s no question the conversation with regulators, with governments, and within the industry have changed within the last six months,” said Paragem managing director Nathan Jacobsen.
“We’ve gone from pushing through royal commission recommendations as fast as possible and the outcome will be the outcome to ‘let’s pause and have a conversation around how we change’.”
But Mr Jacobsen believes that the only way sweeping change will be achieved is if the industry crafts it, noting that endless Treasury consultations that give little time to respond had failed to right the ship.
“We need to reverse that and say ‘rather than telling you what the problems are, how about we help you craft it?’ – but to do that, there needs to be a level of trust that we’re all in it for the right reasons,” Mr Jacobsen said.
FPA CEO Dante De Gori agreed, saying that professional bodies and licensees also had a role to play in industry “harmonisation”, but warning that serious co-operation would be a “tough ask”.
“It’s possible, it would take a lot of commitment, and a lot of good will from all sides to get it done, but I also think it’s something that should be tackled and something that we should look to do, because that in itself would help to reduce duplication for an example,” Mr De Gori said.
He said that one of the barriers to more affordable advice – in the form of scaled or limited advice – was fear that ASIC would come down hard on those who provided it.
“There was almost an unwillingness to take up (COVID-19) regulatory relief because there was a distrust that the relief would actually apply to them, and there was this sense that ‘I don’t believe there’s relief here and that somebody is going to turn around in 10 years’ time and I’m going to get in trouble’,” Mr De Gori said, adding that ASIC would have to “come out and give permission” to provide limited advice before advisers moved on it.
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