Initiative with ‘greatest potential to move the dial’ absent from Quality of Advice Review

In a new opinion piece published on ifa, CEO and senior adviser at Lifestyle Financial Services Gareth Hall said that the issues paper is missing “the one thing that has the biggest potential to improve advice affordability and accessibility”.

“The government’s Quality of Advice Review is seeking to rectify this by examining how the regulatory framework can better enable the delivery of high-quality, accessible and affordable advice,” Mr Hall wrote.

“However, the initiative that has the greatest potential to move the dial in terms of getting quality advice to the masses is notably absent from Treasury’s Issues Paper.

“There is no mention of workplace financial advice.”

Mr Hall said Australia’s corporate superannuation sector has been “decimated” due to changes to adviser remuneration and cross-subsidisation, with only a small number of planners left who specialise in workplace advice despite demand from employers and employees.

He added that any changes to regulatory framework should seek to reduce the compliance burden on advice businesses.

“At a fundamental level, there must be greater clarity around what constitutes general advice (or information) and personal advice,” Mr Hall wrote.

“Amending the Corporations Act 2001 to resemble the Financial Services Council’s proposed definition of personal advice as only advice that considers the ‘personal circumstances of the individual’ would encourage employers and industry funds to develop and deliver more valuable advice.

“Regulatory change that increases the ability of funds to provide general advice should balance the government’s objective to reduce the extent to which the retirement savings of members is eroded by the cost of providing financial advice with its goal to improve advice accessibility and affordability.”

Read the full opinion piece here.

In a recent webinar, AFA CEO Phil Anderson said the review, to be released in December, has an opportunity to key issues in the advice industry, including declining adviser numbers.

“We need to make sure that we have a focus on retaining as many of the existing advisers who are considering their future," Mr Anderson said.

“But we also need to make sure that we have a steady flow of new advisers coming in to the advice profession so that we can start to rebuild adviser numbers.”

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.