- Yes (57%)
- No (30%)
- Not sure (13%)
It seems the proposal to legally define personal financial advice as either complex or simple is not really that …simple.
Last week’s poll sought your views on whether personal financial advice can be defined as either simple or complex, asking whether the relative complexity of the advice provided should inform the level of the qualifications the adviser needs, and the type of compliance which must be observed?
And advisers were divided in their opinion. Just over half (54 percent) supported the call to redefine personal financial advice based on the level of complexity.
However, one third (33 percent) didn’t support the call while another 13 percent were unsure, indicating that 46 percent were not in favour of the idea.
The call arose from a report by Rice Warner, commissioned by the FSC, which addressed whether personal financial advice could be re-defined as part of a broader agenda to open access to more affordable financial advice for more Australians (see: Launch of Radical Plan to Revamp Financial Advice).
…forced studies for risk specialists on topics they will never advise on…
The poll also garnered vigorous discussion from advisers with one noting: ”Isn’t the purpose of developing a definition of “simple advice” to lower the regulatory burden on advisers and allow for advice of lower level of information? My question is why would someone choose this lower level of information over what they could learn from a website?”
Another wrote: “The advised retail life insurance industry is in rapid decline due to the regulators and legal/compliance teams inability to separate insurance advice from investment advice, which has led to the ridiculous position of forced studies for risk specialists on topics they will never advise on.”
The same commentator noted: “… a stubborn insistence on forcing advisers to do more compliance on simple advice, has led to the current position whereby now most Australians cannot afford advice. Thousands of very good advisers have left the industry, with thousands more to go, for NIL benefit to anyone.”
Our poll is open for another week and we’d be interested to hear your views…
Don’t vote yes because it’s a trap???
Like everything in life, the devil is in the detail.
If the simple advice model is to be designed by the same people who brought the current unworkable maze that is killing the advised Life Insurance Industry, then it will be just more unworkable complexity.
The comment that people could just go to a website if there was lower levels of advice, forgets that people want to talk to a real person and the lower level of advice is a way for Advisers to actually survive what is currently an unworkable administrative and compliance nightmare.
The reality is, that any move to a simpler model, will be better than what we currently have and I wonder who would possibly have voted against simplification?
Because this is how Royal Commissions begin. It’s the fast food of life insurance.
And advisers are prime targets for technological disruption. Making the task simpler means it is easier for a computer to do as good/better job than an adviser.
I don’t know how you could think this is a good thing for consumers or advisers.
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