The FSC wants to see all advice broken into either general or personal categories and the abolition of statements of advice, which would be replaced with concise and consumer-oriented “letters of advice”.
“The burden of compliance is doing nothing to help consumers, it’s actually putting advice beyond the means of average Australians, and driving advisers out of the sector,” said FSC chief executive Sally Loane.
“Our aim with these proposals is to lower the cost of providing financial advice to make it simpler for consumers to understand and access, all without undermining the quality of advice or eroding important consumer protections.”
The FSC green paper – “Affordable and Accessible advice” – also recommends abolishing the administratively complex “safe harbour” steps so that the Code of Ethics is the single tool for complying with best interests duty, and is part of a move by the lobby group to lead the public policy debate on the governing and professionalisation of advice.
“We are keen to hear from a wide range of stakeholders, particularly advisers. As leaders in policy development, we have a great opportunity to re-set the system for affordable, quality and professional financial advice, a critical component in enhancing the savings, wealth and peace of mind for every Australian,” Ms Loane said.
“The status quo will mean advice will consolidate in the wealthy elite, and will remain out of reach for the average consumer.”
Let’s be clear here. The FSC’s sole purpose in life is to help members flog product. Nothing more, nothing less. Their green paper should be confined to the rest room. Product floggers should have not say whatsoever in any future advice policy. They have already had their opportunity and failed miserably. Never again.
Serious question – why is the FSC involved in decisions on the future of advice? As far as I can tell they represent very few actual advisers or licensees other than a couple of aligned networks that are left. They are looking to “lead the public policy debate on how the advice sector should be governed once it is professionalised” – and some of the ideas in the green paper have merit, but why are they looking to lead it – would it not be better led by the adviser associations? Not trying to stir the pot – really a genuine question about why the FSC should be involved.
They are involved in decisions on the future of finance advice because their members used to be involved in financial planning. They majority of these members have now left personal advice but want to expand general advice so they can make roughly the same money for about 1/3 of the cost. Basically it’s so their members can profit from the changes which have been made. I only wish the FPA was that proactive.
You’re keen to hear from advisers??? Must be joke of the month. Your cartel has suffered from total deafness for the last five years!
I have looked at the Green paper. Changing the name of SOA’s to a ‘letter of advice’, will do nothing to reduce the cost of advice if the adviser is still required to produce the same calculations, comparisons and projections. Maybe some of that will be held on file instead of included in the advice document, but the work will still be required. If costs are to be reduced, SOA’s and ROA’s need to be abolished completely. At least for scenario’s where the adviser is not employed by a product manufacturer or receiving a commission, and maybe limited to those who have passed the exam and have the quals. No other profession is required to provide these documents, so what was the point of FASEA?
And the FSC did so well driving the LIF changes why wouldn’t we agree with them and destroy the rest of the industry.
This is the Pot calling the kettle black, the FSC demanded the changes and now they cry foul, the FSC wanted to force non aligned advisers out of business so they could control distribution, well that back fired didn’t it. You reap what you sow Sally. You didn’t listen to the advisers when you pushed for the reforms, so if you want change then join our call to SCRAP the LIF reforms and return the industry back to a FREE MARKET and remunerate advisers for the effort and RISK they undertake.
“In order to prevent it” ???? A tad too late I would have thought.