Government flags possible SOA relief extension

Assistant Minister for Superannuation, Financial Services and Fintech Jane Hume said bringing down the cost of advice was a key priority for the government in making advice more attainable for consumers as an increasing number of financial planners left the sector.

“The number of people that speak to me about things like 80-page SOAs – that is crazy stuff and there should be an opportunity to do better, particularly on single issue advice,” Ms Hume told an industry webinar.

“I know ASIC has allowed for single-issue advice during COVID, that was a regulatory change that has been well received and the take up has been terrific.

“So many advisers stepped up and looked after clients on that issue at very low cost, which was great, so we need to think about how we leverage that and use it a bit better.”

When pressed on the issue of where supply of advisers would come from in the coming years, Ms Hume said it was “a role for the private sector”.

“The government doesn’t like to shape an industry – it must be demand driven,” she said.

“That said, the change we’ve seen in the industry has been amazingly fluid in a short space of time, that’s why it’s been so disruptive. 

“I think we’ll see better quality and oversight of advice, but it’s not perfect yet and I think there are ways we can make the industry more attractive to newcomers and more profitable for those that are already there, but at the same time deliver a better standard of advice, which is what we all expect.”

Ms Hume also flagged fintech as playing a big role in the future of advice, both by cutting down adviser and licensee compliance time and helping to provide low-cost services for clients with simpler advice needs.

“Technology is an important solution to lowering the cost of advice – there’s some great fintech solutions, so how do we get to the stage where you know what comes out of it is compliant, and the auditing is what happens on top of that fintech solution,” she said.

“We’d also like to see fintech solutions that are broadly available, so if someone says 'I’m retiring with $300,000 and I don’t know where to turn', they are able to start that ball rolling and see what parts of the process they need help with.”