According to MLC’s 2024 Financial Freedom Report, this goal is seen as even more important than taking regular holidays or owning your own home.
With 70 per cent of Australians surveyed citing financial “independence” or “wellbeing” as extremely important, there’s little doubt about the critical role financial security plays in helping people achieve their bigger life goals.
But the stark reality is around 12 million Australians will start 2025 with unmet financial advice needs. This isn’t because they don’t want or value financial advice. According to MLC’s Financial Freedom Report, around a quarter of Australians surveyed recognise that having access to financial advice would help them feel more confident when navigating financial challenges.
This year has the potential to be a year of transformative change for the Australian financial advice sector. The proposed Delivering Better Financial Outcomes (DBFO) Tranche 2 reforms, including the introduction of a new class of advisers (NCA), sets the scene for some seismic changes and the opportunity for the sector to make headway into bridging the long-standing advice gap.
2025 financial advice trends
Every adviser has a role to play in these transformative changes. Here are three big trends we’re expecting will shake things up in the advice space in 2025.
A new era for financial advice in 2025 – DBFO and NCAs
The proposed DBFO reforms, including the introduction of the NCAs, signal a potential new era of advice. Bridges supports the intent of these measures which, if implemented effectively, could streamline the advice process, cut unnecessary red tape and make quality financial advice more accessible for more Australians, which could lead to better retirement outcomes.
A key feature of the reforms is the introduction of the NCA, designed to support Australians with less complex advice needs. NCAs are intended to help close the advice gap by bridging the gap between those requiring simple support and advice and those with more comprehensive financial planning needs.
Another cornerstone of these proposed reforms is the push for efficiencies for financial planners. The proposed replacement of the traditional statement of advice with a streamlined record of advice offers a welcome shift. The record of advice will focus on explaining how the advice aligns with a client’s financial goals and best interests. This simplified document, combined with the meaningful advice conversations they have with their adviser, will help clients understand their options.
Additionally, the proposed removal of safe harbour provisions – a statutory checklist currently required to satisfy the best interests duty – will provide greater flexibility for planners to assess the steps required to satisfy their best interests duty. Bridges Financial Services supports policy changes which improve the affordability and accessibility of advice while reducing regulatory burden and maintaining robust client protections.
Investing in tech and artificial intelligence
Artificial intelligence (AI) continues to travel at lightning speed and 2025 will be another big year for AI adoption. Those licensees who have the means to invest in technology and AI have the chance to get ahead in 2025 through improved efficiency and scale. By streamlining back-office processes, advisers can drastically reduce the time spent on administrative tasks, enabling advice to be delivered quicker. This increased efficiency allows planners to dedicate more time to building meaningful relationships with clients as well as service more clients.
Strengthening referral partnerships
With demand for financial advice on the rise, fostering strong relationships with referral partners has never been more critical for advisers and providing important access to value-add services to clients of those referral partners. By identifying the client segments you want to focus on and partnering with referral sources in those areas, advisers can create a consistent and reliable pipeline of opportunities and deliver more advice to more Australians.
Successful businesses will streamline the referral process, ensuring it is effortless for partners while addressing the needs of clients who may not fit the ideal profile. This includes providing tailored pathways, whether it’s digital advice for lower-complexity clients or scaled solutions for those with varying financial literacy levels. A robust feedback loop with referral partners will further strengthen these relationships, while a quality digital experience that educates prospects, qualifies leads and triages referrals based on client needs will set leading firms apart in an increasingly competitive space.
In conclusion
With more people seeking advice and so many seismic changes to the professional landscape, 2025 promises to be a year of change and growth for the industry.
If implemented effectively, the proposed DBFO measures will mark a turning point for financial advice in Australia. By fostering efficiency, clarity and accessibility, these reforms have the potential to make it easier to access advice, leading to better retirement outcomes for consumers.
Nathan Stanton, CEO at Bridges Financial Services.
Nathan, if you’ve hit the nail on the head with your points. For an industry that has had so many headwinds for almost a decade, it’s exciting to finally have some tailwinds. Like anything each licensee/adviser needs to have the right strategies in place to capitalise .
I’d prefer to read this from a successful advice business.
The article is generic and doesn’t actually say anything.
Great read Nathan and agree with all your points – particularly around AI. Think as an industry we have a lot to learn and do in this space