Reducing cost of advice top policy priority for FSC ahead of election

Amongst the list of top priorities for the FSC is reducing the cost of advice by abolishing the safe harbour steps for complying with best interests duty and simplifying documentation requirements for the advice process.

In its report released this week, the FSC said the removal of the safe harbour steps should be the “first priority” of the government in order to enable a principles-based advice model under the existing regulatory framework.

The report also stated that the statement of advice is “driving up the cost” of financial advice and backed calls for the SoA to be replaced with a letter of advice.

It comes after the FSC released a white paper late last year which proposed a new framework that could reduce the cost of advice by almost 40 per cent (near $2,000).

KPMG’s analysis of the FSC’s recommendations found that the cost of providing financial advice would be reduced from $5,334 to $3,466, would save advisers up to 32 per cent of time when dealing with clients and allow them to provide advice to an additional 44 new clients each year.

Other priorities named in the report included maintaining existing tax rules for superannuation, increasing access to life insurance, reform funds management tax settings and finalise the implementation of a product modernisation regime for life insurance and managed funds.

“All sides of politics have an opportunity to use the upcoming election to think about how the financial services sector can support economic growth,” FSC CEO Blake Briggs said following the released of the report.

“Financial services is worth $161 billion annually to the national economy and meets the needs of millions of consumers.

“Recent years have been challenging for Australians and the national economy. To put these challenges in the past, governments should continue to focus on policies that promote growth, boost confidence and encourage business investment.”

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.