How advisers can lift their practice to the next level

This year’s summit will explore the evolving landscape of advice and how statements of advice can be delivered in innovative ways, how to entice advisers back into risk advice, and how advisers could service clients across different generations.

ifa spoke to three summit speakers about how advisers could grow in their practices, and how platform providers could help them streamline efficiencies.

Marc Fabris – founder of Risk Hub

With the prevalence of underinsurance in Australia and fewer advisers providing risk advice in the recent past, Fabris urged platform providers to enhance tools in risk insurance to attract advisers back into this space.

A Risk Hub survey of almost 200 risk and other advisers in 2023 found that 43 per cent would like to grow their focus on risk while 46 per cent require help with processes. Fabris remarked that satisfaction with the technology being used to deliver risk advice was at its lowest levels among advisers.

“While there are many software platforms in the market that service advisers, I’d have to say very few have done anything substantial to help risk insurance advisers,” he said.

“I’d love to see a greater focus on risk insurance because there is demand for improvements in technology support.”

Fabris called for tools to help advisers with the needs analysis process (where they determine the type and amount of insurance, income protection, or trauma cover a client requires) and compiling statements of advice (SOA).

Nathan Fradley – specialist adviser at Nathan Fradley Advice

Advisers do not have to wait for the Quality of Advice Review (QAR) recommendations around SOAs to be implemented before simplifying it, Fradley said.

“We, as advisers, can lift our game above the QAR recommendations and get on the path to becoming self-regulated. This way, we can gain respect and increase our professionalism,” he said.

The Australian Securities and Investments Commission’s (ASIC) RG 175 regulatory guide stipulates that advisers must present SOAs in a clear and concise manner to promote understanding of advice by retail investors. As such, the current regulatory framework already allows advisers to present SOAs in a digestible format and improve client experience.

“The QAR changes are not going to be a silver bullet if they are implemented. We can do so much now,” Fradley said.

“As soon as advisers start leaning on SOAs as a compliance tool, they’ve already lost. They ironically become non-compliant because of the language within the regulatory guide.”

Advisers can present their SOAs in any format that suits the client (including written documents, client meeting recordings, or charts, tables and graphs) as long as it includes their advice and product recommendations and the reasons for them, risks, costs, trade-offs, and considerations of other alternatives.

“Figure out what your clients need to know to make informed financial decisions and include that information in the SOA in a clear, concise manner,” Fradley said.

James O’Reilly – director at Northeast Wealth

Australia is about to see the largest intergenerational wealth in its history, with estimates showing that around $3.5 trillion in assets will change hands by 2050 and $175 billion in wealth will move to younger generations every year.

Advisers are primed to facilitate this by initiating conversations with their clients, O’Reilly suggested.

“An effective way to begin these discussions is to talk about tax implications and strategies, particularly in the superannuation environment,” O’Reilly said.

“The vast majority of pre-retiree clients with healthy retirement balances who I’ve met have not given thought to likely tax outcomes when they pass on their money to their children. We tell them that with intelligent planning, they enjoy better tax outcomes from any benefits made to their children.”

These conversations could also lead clients to share concerns with their adviser about their children’s financial circumstances (including their ability to enter the property market), which opens doors for advisers to attract a new generation of clients.

“By encouraging these conversations, advisers could identify opportunities to tell clients that their children may benefit from receiving advice,” O’Reilly concluded.

To hear more about innovative strategies to streamline SOA processes, attract a new generation of clients, and consider providing risk advice, come along to the Adviser Innovation Summit 2024.

It will be held on Tuesday, 4 June at Telstra Customer Insights Centre Sydney, and Thursday, 6 June at Zinc at Fed Square, Melbourne.

Click here to buy tickets and don’t miss out!

For more information, including agenda and speakers, click here.