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Level Playing Field Call for Simple Advice

July 26, 2022

The Advisers Association has called on Treasury and regulators to address what it sees as an unfair situation which allows social media influencers to escape the heavy regulatory burdens imposed on financial advisers when providing short, simple financial information.

A statement released this week by the TAA, which now represents around one thousand financial advisers, says a side effect of the exodus of financial planners from the profession will see the rise and rise of social media financial influencers – ‘finfluencers’.

In a trend which it does not see abating, the association’s CEO, Neil Macdonald, notes finfluencers do serve a need for financial information and financial education, particularly for younger people, and people who cannot afford personal financial advice, and that he doesn’t want to see them disappear.

…it’s extremely unfair that well-qualified, experienced, professional advisers have to go through so many more hoops than finfluencers

TAA chief, Neil Macdonald …hoping the Quality of Advice Review will address the inequity

While welcoming the role that finfluencers can play, however, Macdonald points out that “…it’s extremely unfair that well-qualified, experienced, professional advisers have to go through so many more hoops than finfluencers to provide similar information and education.”

Macdonald adds that one of the reasons consumers, particularly younger consumers, pay attention to finfluencers is that they typically provide short, sharp, easily digestible financial information on one particular aspect of growing wealth or managing money at a time:

…advisers carry heavy regulatory burdens which hamper them in delivering similar information at a price the consumer can afford

“The challenge facing advisers, however, remains the same as it has long been – advisers carry heavy regulatory burdens which hamper them in delivering similar information at a price the consumer can afford. Finfluencers do not carry that same burden,” says Macdonald.

In calling on the Quality of Advice Review process to address what he describes as an inequity, Macdonald says advisers should be enabled to provide simple advice:

“The fact that consumers listen to finfluencers indicates to us that there is an appetite for bite-sized advice within the community and therefore there is a place for scaled or scoped advice.”

He adds that financial advisers are the people best qualified and experienced to provide good quality advice, “…but they have their hands tied by a range of factors including product-focussed legislation, multiple regulators and licensee policies and processes. They are not enabled to provide simple advice, simply and they should be,” says Macdonald, who also stressed the importance of raising consumer awareness of the difference between finfluencers and financial advisers.

“More needs to be done to create awareness that quality advice is not just information, or education, it’s not just product. It’s about the overall strategy, managing the risks and it’s personal. It is tailored to the individual client and is designed to help them stay on track,” he said. “It’s also about helping them to avoid the noise and stop them from making silly decisions.”