2024 will be a watershed year for financial advice in Australia, according to the FAAA, which is prioritising making it easier and cheaper to provide advice, re-engaging with consumers, and growing the profession.
In outlining the FAAA’s priorities and expectations for the year, CEO Sarah Abood says the association expects to see positive and beneficial change to the profession over the next 12 months.
“It is the year when clarity and certainty about the provision of financial advice should be delivered, both to financial advisers and to Australians who can benefit from their advice.”
She notes there’s been much discussion about what the future of financial advice should look like.
“It’s our hope and expectation that this will be the year that details are worked out and meaningful and positive changes will be delivered.”
Making it Easier and Cheaper to Provide Advice
Abood highlighted the three main areas the FAAA will be focusing on during 2024 with the first priority being making it easier and cheaper to provide advice.
She says a common refrain from members is that ‘it shouldn’t be this hard to provide great financial advice’, and the FAAA will be working closely with government, regulators and other stakeholders to address this issue.
“While it isn’t a new problem for the financial advice profession, it has become an increasing imperative in the past 12 to 24 months.”
… We are calling on government and regulatory bodies to move swiftly to provide the necessary detail, and timelines for consultation and implementation…
Abood says the association has been generally supportive of the package proposed by the Federal Government in response to the QoA Review recommendations “…but there is still a way to go with important detail still missing in some areas. We are calling on government and regulatory bodies to move swiftly to provide the necessary detail, and timelines for consultation and implementation.”
The association will be asking its members to respond quickly, and in numbers, to any consultations or submissions “…so we can develop a unified response on their behalf in a short timeframe.”
The FAAA also continues to engage on other areas which impact on members’ costs of doing business, including the ASIC levy, and the implementation of the Compensation Scheme of Last Resort.
…another key area of focus will be the use of technology in financial planning…
Another key area of focus will be the use of technology in financial planning where opportunities exist to streamline operations and reduce cost.
“We will be including the role of AI, looking at both its ability to assist in the delivery of advice but also its potential to do damage. There are a range of social, ethical and legal questions that we will be working through with members…”
Re-engaging With Consumers
The FAAA’s second area of focus is re-engaging with consumers, to improve understanding of the value of advice from a qualified, professional financial adviser.
Abood says research continues to show that people who receive advice are financially better off, and also have improved general wellbeing, compared to those who don’t.
… perceptions of the ethics of financial planners continues to improve…
“It is encouraging that research by the Governance Institute of Australia shows that perceptions of the ethics of financial planners continues to improve, according to its latest Ethics Index 2023 (2023: 21 compared to 2022: 16). Financial advisers are now more trusted than many occupations – including for example, lawyers and CEOs (which both ranked 9 in 2023).”
However, she notes, there is still a perception that financial advice is only for the already well-off. “The reality is that the majority of working Australians, as well as retirees, can benefit from the advice of a registered, qualified financial planner…”
Growing the Profession
The third focus is on growing the profession, with Abood saying the fall in the number of financial advisers in recent years “…remains a big concern.”
“We need more great advisers, and to achieve that we need to get the message out there that financial planning has a really attractive career path. There is no reason that we can’t reach more than 100,000 financial advisers. There are around 200,000 registered accountants in Australia, and the need for financial advice is just as significant,” she says.
The FAAA will be looking at ways to increase the number of students enrolling in financial planning degrees and Abood notes financial planning is also a great option for people looking for a career change. It also sees opportunities to attract overseas students and professionals to Australia.
