SYDNEY: 28 September 2022 – The changes that are likely to occur as a result of the Quality of Advice Review (QAR) and other changes occurring across the industry will ultimately make advice more affordable and accessible for consumers, according to The Advisers Association (TAA).

TAA CEO, Neil Macdonald, said that implementing the proposals creates potential for financial advisers to change not only the way they service clients, but also how much they charge and therefore how many clients they serve. “It’s old news that there are currently not enough advisers to service the number of people wanting advice,” Mr Macdonald said. 

“The new news is that the significant time savings that will occur as a result of recognising an adviser’s professional judgement and removing much of the unnecessary paperwork and duplication that currently exists within the profession will mean advisers will be able to service many more people. That’s great news for Australian consumers.”

Mr Macdonald reasoned that if a large amount of unnecessary work is sliced out of any service, it must significantly reduce the cost to provide that service and allow that time to be used more productively.

“A classic example in our profession is ultra-long statements of advice that are left largely unread by clients, and which are fast-becoming unnecessary, if they are not already,” he said. 

Removing redundant processes and passing cost-savings on to the people wanting advice services – in other words, making it more affordable – means advisers will attract more clients. 

“Having cut much of the hard work out of delivering that service means advisers are also going to be physically able to service them.” 

Mr Macdonald said the question is how quickly the financial advice community is prepared to move with the times.

“I’ve heard a number of industry commentators bemoaning that affordability will remain a problem. They don’t seem to be able to factor in the considerable efficiencies and cost savings that QAR and other changes will bring about,” he said. 

However, Mr Macdonald said he believes the advice profession will ultimately move with the times. “Like any profession, we will eventually bring in new processes and new people who will charge less, based on less experience,” he said. 

Changing demographics will mean that clients will also change. “Younger people will come to advisers with different expectations – for example, for a ‘health check’ and episodic advice,” he said. 

“However, those parts of the advice community, including practice principals and licensees that refuse to evolve, as Darwin famously stated, will most likely become extinct.”