ASIC releases results of affordable advice consultation

The corporate regulator began the consultation in November last year and received 466 submissions with an aim to understand the issues impacting the supply of “good quality affordable advice” and to implement steps ASIC and the sector can take to improve consumer access, which included roundtable discussions with advisers and licensees this past April.

Respondents identified overheads and fixed costs, SOA preparation, and rising regulatory and governance costs as contributing factors to the cost of advice, while the biggest obstacles in providing limited advice were identified as:

• Too costly to provide
• Regulatory requirements for comprehensive and limited advice are the same
• Concerns about meeting the FASEA Code of Ethics
• Some advisers unclear about regulatory requirements for limited advice
• Advisers restricted from providing limited advice by licensee or other party

Meanwhile, of 215 respondents, 148 said they don’t provide digital advice and have no intention to due to lack of demand, consumer preference for human adviser and compliance concerns.

Based on those roundtable discussions, ASIC said on Friday it has “identified a number of initiatives that may assist industry participants in providing good-quality, affordable personal advice to consumers” and intends to move forward with those initiatives.

ASIC has also committed to providing the industry’s feedback to government and to continue working with those in the sector.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

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Neil is also the host of the ifa show podcast.