On a new episode of the ifa Show podcast, adviser and founder of digital solution Scientiam, Nigel Baker, said the “shake-up” of the industry has called for a new regulatory framework; one that supports and emboldens advisers.
“It would be great to have a future of the industry where there’s more trust, I suppose,” Mr Baker said.
“The regulators trust the industry and say: ‘You’ve got to be able to help more people. Some people don’t need full advice and some people do and we’re going to trust the advisory industry to better work that out.’ Just like, if you’re a doctor, you can say: ‘You’ve got a headache, go back to the chemist.’
“Where as at the moment, it’s like, someone comes in the office and they need a 40-page statement of advice and that’s just not practical. That’s obviously led to some problems we’re seeing in the industry now.”
To own that conversation with regulators, Mr Baker said advisers should engage with local politicians on their concerns, share their stories with others in the industry and work together.
Aside from this, the Scientiam head said advisers should also consider changing up how they engage with clients.
“It’s not about product, it’s just about giving people information to make better financial decisions,” Mr Baker said.
“That can be as simple as how to save for a mortgage, or how to repay your debt faster. At the moment, people get scared about having even those conversations, because they’re scared about: ‘Well, is that advice? Do I have to document it? Do I have to give a statement of advice now? ‘All those sorts of things.
“So, I think the more and more advisers can talk to politicians, get out there, work together, and I think then we’ll be able to help transform the industry going forward.”
Listen to the full episode with Mr Baker here.
It comes after the Association of Financial Advisers (AFA) CEO Phil Anderson said that the QAR must look at the “significant layers of bureaucracy” forced on the advice sector in recent years.
On the recent episode of the ifa Show, Mr Anderson said it doesn’t surprise him that many of the QAR submissions issued to Treasury have recommended the regulatory burden placed on planners be reviewed.
“When you think about it, we’ve had such a period of vigorous, almost constant regulatory reform that is just built over the top of each other,” Mr Anderson said.
“So we’ve had the FOFA reforms, we’ve had the LIF reforms, we’ve had professional standards. We’ve had all the recommendations out of the Royal Commission. On top of that, you’ve had DDO and a range of other reforms. It’s all just one layer on top of the other layer.”
Mr Baker with respect everything that needs fixing in the FP universe has been tabled infinitum so advisers wasting more of their valuable time in talkfests with politicians is a low value strategy. Positive actions to alleviate the known FP pain points are what many are hoping for from the QAR.
Advisers have been bombarded by ever increasing red tape with not enough transition time given and have no time to talk to politicians. We made the time – no one listens. Not politicians, not ASIC. They think they know it all and we are just whinging. Or they don’t care.
Two licensees that we have been with, have told us that ASIC does not listen. We just hope they are now listening and not just pretending to with some pre determined outcome in mind.
We had pretty much the same experience – our Licensee’s feedback was that ASIC refuses to listen or discuss anything, and completely dismissed our questions and concerns.
I think it’s becoming obvious to all post-election that Scomo, Frydenberg, Hume, O’Dwyer, Porter and the rest of the LNP have done whatever they like whilst in power and Financial Advisers are one of a number of Industries that have copped an awful betrayal and breach of trust by having regulatory impositions with little regard for the consequences.
and the Public Servants at ASIC and Treasury are innocent?
It’s a two way street (why should we continue to be bullied into nonsense conformity???). Even if the Govt. and ASIC were to show more trust in advisers, why should advisers show any snippet of trust in the Govt. and ASIC? Trust needs to be earned rather than entitled. I am 100% sure the majority of hard working and well qualified advisers have more than earned the trust that they don’t currently receive, after being put through the wringer over the last 10 years, but I can’t say the corresponding applies to the Govt. or ASIC.
While I agree with the sentiment, the Government has taken the misdeeds from the Royal Commission and used this as a stick with which to beat us. It doesn’t matter that the executives at the banks/AMP were the decision makers and responsible for the major problems…we are all tarred with the same brush as far as ASIC is concerned.
The real problem is none of the executives in ASIC actually understand the value financial advisers provide other than to get insurance or invest money.
Easy.
All strategic advice should not need to be included in an SOA. Leave it up to the adviser to figure out how best to tell and inform the client.
An SOA should be a little bit like a prescription, but just a summary of what new products are required.
This would free advisers up to concentrate on strategic advice and allow them to offer it at a much lower cost.