With Financial Services Minister, Hon Stephen Jones, reinforcing no changes to the Terms of Reference for the Quality of Advice Review last week, one thing is clear: reducing the cost of providing advice to allow more advice on the issues consumers need and want while ensuring they are protected - is the key issue before the Review.
Views broadly reinforced not only in a joint submission the FSC signed along with 11 advice bodies last week, but many of the submissions to the Review on Treasury’s website.
There is no question of the value the advice sector provides. This is a review about advice, in all its forms, which has tasked a united sector to propose ways of getting the regulatory framework behind the delivery of more professional advice to more consumers. It means less disclosure and more advice that’s easy to understand and specific to what consumers want when they want it. Although no advice need is the same, the regulatory framework takes a one size fits all view of those same consumers. Although the advice sector has transitioned to become a profession, much of their work is overlayed with prescriptive regulatory requirements rather than professional judgement. And while there are many statistics on the state of the advice sector, here are some key trends:
- Median advice fees are reportedly at $3,500, up 8 per cent from last year, they were reportedly $2,500 in 2018.
- The number of consumers seeking advice has dropped under 2 million, in 2018 it was reportedly 2.6 million
- There are 16,545 advisers, in 2018 there were over 25,000.
As more Australians approach and commence retirement with insufficient retirement income in facing into high inflation and rising interest rates, the need to reverse these trends is urgent. The FSC’s submission considers in detail the Review’s questions, and will set out the model its members are confident will meet this challenge.
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