The Advisers Association (TAA) says any new model for financial advice must level the playing field for financial advisers.
Commenting on a Rice Warner research report launched by the Financial Services Council (FSC) this week which proposes a new model for financial advice, TAA CEO, Neil Macdonald says, “Those best qualified and experienced to provide advice currently 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 and they should be,” he says.
He says ASIC’s temporary COVID-19 relief measures around superannuation are an example of the uneven playing field for financial advisers.
“The measures include a temporary no-action position for superannuation trustees to expand the scope of personal advice that may be provided by, or on behalf of, the superannuation trustee as intrafund advice. However, financial advisers must still meet Best Interests Duty and Safe Harbour obligations for new clients,” he says.
“If a client wants to see their financial adviser for intrafund advice, the adviser should be subject to the same rules and disclosure requirements as those providing intrafund advice on behalf of superannuation fund trustees.”
TAA believes that terms such as ‘general financial advice’, ‘intrafund advice’ and ‘roboadvice’ cause confusion amongst consumers and should be redefined as ‘general financial information’, ‘intrafund information’ and ‘robofinance’ respectively.
“We also need to arrive at an appropriate term for people who provide financial information, particularly given that the terms ‘financial adviser’ and ‘financial planner’ are likely to soon be protected. The new term must make it obvious to consumers that when, for example, they seek intrafund information from a provider, they will only receive information about that firm’s products.” He suggests an appropriate term might be ‘financial assistant’.
Mr Macdonald says the industry needs to move much faster towards being a profession, although it is not an easy task, given that even the Corporations Act focuses on product rather than advice.
“Commissioner Hayne missed a great opportunity during the Royal Commission when he did not call for the separation of advice and product. It is very difficult for the industry to move towards greater professionalism without it.”