Addressing the recent ASFA virtual conference, ASIC commissioner Danielle Press was asked what she would like the industry to look like at the end of the current period of structural and regulatory change.
“I’m a believer in advice – good advice at the right point in life provides consumers a better outcome, so I would like to see the industry thriving,” Ms Press said.
“Super funds play an important role in that in an intra-fund piece but also as people shift from accumulation into retirement.
“I think I’d like to see a point where we’re not arguing about the professionalisation of this group anymore, where people are using their professional judgement and we’re providing good quality advice – probably more episodic than necessarily the long tail, although some people will want the long tail.”
The comments come following ASIC’s recent industry consultation around the barriers to affordable advice, with the regulator having urged more licensees to offer scaled advice following research that the majority of consumers wanted to receive advice in episodic form.
Ms Press said she believed advice had an important role to play in helping consumers “control the chaos” of their financial lives.
“I’d like to see an ability for our members in super funds and consumers generally having a way to see through the chaos and be confident in their outcomes from their advisers,” she said.
Ms Press added that she would like to see super funds improve the clarity of their communication to members, particularly around matters that could be perceived as giving advice – such as communications around the Protecting Your Super reforms, which had been flagged by ASIC in a 2020 review as containing “unbalanced messages” to members about the reforms’ potential impacts.
“There were good tips in our Protecting Your Super statements around how you communicate that fair and balanced approach to changes coming through and decisions consumers need to make without breaching that general versus personal advice framework – that’s a tricky one that trustees need to think hard about,” she said.
What a fool is Danielle. So lost within the ideologically leftist, adviser hating ASIC.
This sounds like a typical statement from and ASIX Commissioner who will do anything to support ISA. She shows total lack of understanding about what retirement advice encompasses. It is not just about moving from accumulation to pension. Clients want advice on how to invest funds they may have outside of super, making sure their estate planning arrangements are in place (not just about death benefit nominations of reversionary pensions) how they might qualify for the age pension, etc. etc.
Danille’s statement is that of a lawyer who only think in transactional terms when providng legal advice to their clients on a one off basis.
How can we as professional planners provide scaled or limited advice when this is total breach of the FARSEA Code of Ethics, Best interest duty and the Safe Harbour steps. It seems to me that none iof these are being applied to ISA and their totally conflicted in-house advisers.
How does a consumer know what they need advice for? While there are certain occasions when a consumer might have a specific issue that they require assistance with, most clients are comforted by the fact that their adviser regularly reviews their situation. This is because clients ‘don’t know what they don’t know’. Does nobody go to the doctor for a check-up? Or do they just wait until they’re suffering major symptoms? Isn’t this obvious?
Scaled advice has a place, but it is a very poor alternative to holistic advice.
They can change it and call it whatever the hell they want. My clients value what I do and will continue to pay me $X in return for me giving them Y service/advice. Clients don’t care if it’s called ‘scaled’ or whatever, they don’t read this junk in the news, they don’t follow ASIC on FaceBook, they have me, so they don’t have to do any of that, nor do they want to, and hence why they will always have me and pay me and I’ll continue to serve them to the best of my ability as a result. I think us advisers can get too caught up in this type of stuff. I’ve navigated changes over the last 20 years that were unthinkable in advance, yet through all of them, I’m still here, still doing what I have always done, largely unchanged, still charging similar (albeit higher) fees per client over the course of a year (despite what that is called or how it is paid perhaps changing) so don’t stress people. It’s frustrating for sure that they don’t get what we do, but so far, despite their best efforts, they havent really changed how the good operators operate anyway, so just press on and re-label fees, advice, services, etc to whatever their word of the year is and you’ll be fine.
How could anyone possibly believe a consumer only needs to breeze in to see an adviser when they retire to turn their super from accumulation into pension. Too bad about all those poor consumers who panicked in March last year and switched to cash. When they get their ‘episodic’ advice from their super fund upon retirement, that will fix everything, won’t it? Surely if financial advice is now a profession, we need practicing, experienced financial advisers leading this debate, not some government bureaucrat sitting in their ivory tower.
I’ve provided periodic advice before. Usually when the client comes back, they haven’t implemented or remained on course of the plan. Plus, the rules change every few months, so how would they expect to keep up? I’ve had client come to our firm from “scaled” super fund advice, asking us to just take over. My clients with an ongoing relationship generally remain committed to the plan, don’t miss the implementation and are better off for it. E.g. the contribution age increasing to age 67 on 1 July 2021. Those turning 67 in July on a periodic arrangement, would need to know the rules have changed and have an understanding of how that might impact them. Those with an adviser relationship are proactively informed.
I would imagine Mrs Press has never provided advice. It also appears from her statements in the media that she does not know the Code of Ethics exist.
Asking consumers whether they want periodic or ongoing advice is a bit misguided. Most consumers don’t know what advice is. Once they experience both and have an understanding, they may prefer the ongoing advice. ASIC don’t even know what advice is, so consumers would find it hard to have an understanding with no experience of the service.
To think you can “control the chaos of the their financial lives” in one sitting.
well I can see with clarity that centrepoint AFSL and ASIC are on 2 completely different pages .. whereupon my direct query with centrepoint about their interest towards the recent ASIC survey they did not show any interest WHATSOEVER ! why as an adviser is it so debilitating seeing these factions at play and even our “leaders of industry” non-aligned. at the end of the day everyone should be working for the client …
Major licensees have a lot ot lose by ASIC leaning into scaled advice. If AR numbers shrink to 10,000 in Australia then single licensing looks like more of a future. Their business model is still based on having lots of ARs tied up in regulatory red tap.
If you are under any illusion ASIC are trying to kill off advisers and have intra fund advice as the only show in town, read through Daniele’s statements. In her mind, all you need advice for is to do with Super.
“Super funds play an important role in that in an intra-fund piece but also as people shift from accumulation into retirement.”
“and we’re providing good quality advice – probably more episodic than necessarily the long tail”
“I’d like to see an ability for our members in super funds and consumers generally having a way to see through the chaos and be confident in their outcomes from their advisers,”
You would think she actually worked for ISA. God help us.
She was CEO of Equip Super for 6 years. It’s no surprise she thinks that super fund advisers are the answer to all the difficulties in advice.
Everyone prepare yourselves for carve-outs.
Accountants will be able to recommend contributions with no compliance paperwork or risk.
Super funds will be able to recommend rollovers in, insurance and investment options with little compliance paperwork and no risk.
And Financial advisers will be bound by FASEA and be held responsible not just for the advice itself but for anything that wasn’t covered in the advice.
Meanwhile more regulation , more paperwork– ASIC hasn’t heard of FARSA.
Example of episodic advise- “I’m about retire and haven’t got any money – what do I do.”
Answer-“Get Some”
It looks like ASIC aren’t even trying to hide their anti-adviser agenda anymore. Calling ongoing financial advice, which millions of Australian consumers happily utilise – ‘the long tail’, is utterly disrespectful to these consumers, who are facing the loss of such advice or massive increases in price thanks to ASIC’s ongoing assault on our profession. These consumers repeatedly rate their financial advisers on par with the most trusted professionals. The ongoing advice provides these consumers with direction and comfort in their lives, and protection against unlicensed con artists and scammers which ASIC does little to prevent. Yet Press wants ongoing advice to be largely replaced with one-off advice delivered by conflicted employees of product providers? This is just gob-smacking from our regulator.
ASIC has no idea. Scaled advice will never be allowed by licencees until the ridiculous and onerous rules around BID are changed. ASIC loves to celebrate banning advisers for breaches of BID, yet on the other hand is saying don’t worry just do scaled advice, you will be fine. Sorry no one believes you ASIC, particularly when you are hell bent on banning advisers at the drop of a hat. Show some real direction, and do you job. Clients are significantly worse off since BID was created, so what are you going to do about it?
Research, I believe you have missed the points Ms Press is making.
1) ASIC wants product employees to deliver the “advise”. Conflicts just do not seem to matter.
2) All other Financial Planners – look out as ASIC gets a few each and every week. “Heads on Sticks” I think they call it? Your point here Research are valid.
And to think, all this from ASIC – under a Liberal Governments – successive Liberal Governments. Scott Morrison and Josh just seem to be the best policy makers ISA could ever wish for.
A former financial adviser who does not see the value of ongoing advice.
On what evidence basis does the Commissioner found her view that advice in episodic form is the preferred form of advice?
Episodic advice would not have stopped people withdrawing their money during the Covid-19 panic in March as just a very simple example. Episodic advice is what they get from their industry funds and we can see what happened there.
So the ASIC Commissioner thinks it is fine for millions of fund members to pay an ongoing fee, without informed consent, for advice most of these members will never receive. Otherwise called fees for no service. Unbelievable.
Using “scaled” advice as a solution to un-affordable advice and regulatory red tape is a poor outcome. It’s like putting a finger in a leaking dam. You can’t have one sector of the Advice industry, super funds and firms like StatePlus/Aware Super pumping out cookie cut scaled super advice only and more than likely totally ignoring FASEA and Best interest obligations cause “it’s scaled”…and then using FASEA and BID on advisers that provide holistic advice when scaled advice backfires on them or as an excuse to cull them.
I love the buzzwords. Last year it was “community” and “culture”, this year it’s “episodic”. So nevermind the ongoing staff and PI costs, education and levyies. Put your sandwich board out on the street and hope someone will walk in to pay you $200 for an hour’s worth of advice. The only mob that can run that system is once again banks and big super. Congratulations Royal Commission.
This is exactly why ASIC are pursuing it. They thought FDS and Opt-In would kill us off. But it didn’t. They underestimated how engaged and satisfied our clients are. Now they are getting more creative, but still the goal is the same.
So, advise paid for by the product paid for by members via an ongoing fee that is not able to be opted out of is the way to go then Ms Press and ASIC? Could it be more conflicted? Funny result occur when loads of FUM are involved?
Most people heading into retirement should have advice at least a few years out to ensure they have planned and allowed for all the issues with moving into retirement and making the most of their opportunities. Moving into retirement can be very complex for many, and advice and structure can mean the difference between a comfortable, certain, relaxed retirement and guesswork or poor outcomes.
Can someone let Danielle know that retirement is not just a switch from accumulation to pension phase in the same fund for most retirees.
As new professionals, where does that leave FASEA and the standards requiring us to think more broadly than a client has wants us to? Financial advice is much more than episodic superannuation advice.
Ms Press is not talking about you delivering the advice – the Product will deliver the advise – it’s call Intra Fund Advise and it does not need FASEA etc. The journey to becoming a profession was a distraction whilst ISA went after the prize – FUM. Now they have it, they intend to keep it.
please danielle could you expand on the role available for independents and the conflict of issuing advice by industry super funds, are consumers getting the full picture? “Super funds play an important role in that in an intra-fund piece but also as people shift from accumulation into retirement.”