The FAAA supports the principle of qualified advisers being employed within AFSLs and advice practices but queries whether the fact this advice needs to be free may mean only larger firms are likely to employ these advisers.
At a media briefing discussing the association’s outlook for financial advice, FAAA CEO Sarah Abood was asked by Riskinfo whether it agreed with the principle of qualified advisers within AFSLS and advice practices (see: Poll Result – Qualified Advisers Inside Advice Practices).
“In summary, yes,” she said, noting that a number of members had raised the possibility, and pointing to a clarification from the Financial Services Minister that there was there was no impediment to existing AFSLs employing qualified advisers.
Abood said FAAA members see these advisers as perhaps a way to start engaging with the children and grandchildren of their existing clients.
“The issue that members raised was that they would need to charge for that advice. The cost is likely be substantially less than the cost of a full professional adviser, but nevertheless there aren’t many practices which are big enough, or have big enough margins, to be able offer that service entirely for free,” she said.
…The FAAA has been advocating in the current round of consultations that there should be no restrictions on charging…
The FAAA has been advocating in the current round of consultations that there should be no restrictions on charging for the services of qualified advisers.
Abood explained the Michelle Levy report proposed the service should it be free, but it also proposed the duty be only be good advice, not the best interest advice. However that changed in the Government’s response to the QoA Review and the advice would now be held to the high standard of the best interest of the consumer.
“We see no reason why [charging] shouldn’t be allowed and in fact argue it’s not a level playing field, if small firms aren’t allowed to charge [for this advice] they can’t do it, and then that would effectively restrict this option only to large financial institutions.”
FAAA general manager of policy, strategy and advocacy Phil Anderson added the FAAA position has been supportive of this new class of adviser “… provided the scope of the advice they provide is narrowed to something that is more simple advice and the education standard is appropriately high.”
He says the association believes this could be applied within advice practices, but charging is a challenge.
“The issue is whether that charge could come out of the clients’ existing advice arrangement with that licensee, so it’s reliant on income that is otherwise being generated by that practice with that client,” he said.
Jeremy nails it every time.
This has become, what it always becomes when people who do not work in a sector, have little understanding of that sector, then come up with a plan to fix the issues they caused with their past Regulatory maze of red tape that has thrown the Advised Life Insurance Industry into absolute chaos, by then agreeing in principle to a new set of rules that creates more confusion and does nothing to fix the real problems facing the practitioners who do the actual work and create the premium income to sustain the Industry.
Fawlty Towers has nothing on what has occurred in Australia regarding the provision of Life Insurance risk advice.
What is wrong with all these people who cannot see, or refuse to acknowledge that the current system is broken, the solution is SO SIMPLE and yet what do they come up with once again? A new set of confusing requirements that will NOT FIX the issues, they will just exacerbate them.
Comments are closed.