A side effect of the exodus of financial planners from the profession can only be the rise and rise of the finfluencer – a trend which The Advisers Association (TAA) does not see abating, despite the release of ASIC Information Sheet (INFO 269) reminding social media commentators not to stray across the line from information into advice.
“Finfluencers do serve a need for financial information and financial education, particularly for younger people, and people who cannot afford personal financial advice, and we don’t actually want to see them disappear,” said TAA CEO, Neil Macdonald.
“However, 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.”
Mr Macdonald said 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.
“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.”
Mr Macdonald said he hopes the Quality of Advice Review (QAR) will address this inequity.
He also said 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 said.
“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.”
Mr Macdonald said it is important to raise 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.”