Years of overt scrutiny have dumbed down advice

The advice industry has been under close scrutiny for years, shifting the attention from good advice to a perfect compliance file and, consequently, leading to more expensive and lesser-quality advice.

According to Timothy Munro, the obstacles advisers face are oftentimes insurmountable.

“We’ve seen FOFA and we’ve seen it back in about 2013, ’14. We’ve got the royal commission with FASEA. We’ve got all these things, we’ve got layers and layers and layers of stuff being put on everyone. Have mum and dad got better or cheaper or more understandable advice throughout the whole process? Absolutely not. And it is so ridiculous,” the CEO and founder of Change Accounting and Advice said on a recent episode of the ifa Show.

The red tape and bureaucracy have pushed many advisers to the brink, leaving even Mr Munro questioning why he got into advice in the first place.

“Look, every adviser, if they’re honest is thinking, ‘Why am I doing this?’, I’ve thought about it multiple times. It is so difficult to keep doing what we’re doing in a compliant way,” Mr Munro said.

He drew attention to the multitude of issues advisers in dealer groups face, underlining the burdens imposed by both the dealer groups and ASIC and their often-contradictory directives.

“I’ve seen situations where advisers have followed what the compliance team of a dealer group have told them to do. And then afterwards, ASIC would ban these advisers,” he continued.

“I think that there’s something fundamentally wrong with our industry, because if you’re an adviser, yes, you expect to have a level of knowledge. But the point of a dealer group is that there are smarter people than you on the compliance team that will give you guidance about what you should do. Now, if you follow that and do that, isn’t the dealer group responsible for that incorrect advice rather than the adviser? But at the end of the day, it’s the adviser that’s being smashed.”

To hear more from Mr Munro, tune into the podcast here.