Financial planner outlook positive following tempestuous times

From

Dante De Gori

The future of financial planning is extremely positive – one reason being the ever-growing need for financial advice by Australians. 

This was the strong message by Mr Dante De Gori CFP®, CEO of the Financial Planning Association, in a presentation delivered to a Melbourne event hosted by financial services communication specialists Pritchitt Partners.

“However, it will be different, it will be financial planning but not as you know it,” he said. 

“The FPA’s role is to help promote the work our financial planners do in making a meaningful positive difference in the lives of 2.6 million Australians.” 

Mr De Gori said that he believes that financial planning is of national importance, as financial wellbeing is second only to one’s health.

“Just as we have access to universal healthcare, we must really consider access to financial advice for Australians that need it.”

He said that in recognising existing problems, a blueprint of areas that need to be addressed has been developed to manage the current challenges that face the profession and cannot be ignored.

These include: compliance needs and cost; education standards and reform; changes in the market, such as banks leaving advice; and business valuations. 

He added that other challenges include: affordability and access of advice; true technology solutions in the planning process; the role of the licensee; consumer awareness and understanding; the number of regulators in the space; professional indemnity insurance; and a single disciplinary system for the profession.

Mr De Gori also highlighted the need for better definition covering financial planners, financial advisers, accountants, intra-fund advisers, life insurance advisers, SMSF advisers, investment advisers, superannuation advisers, time-share operators and stockbrokers.

He said in the longer term he hopes to see the occupation of financial planning and financial planners being recognised as a profession throughout Australia; financial advice fees being tax deductible; and universal access to financial advice with the help of low cost technology. 

“There will be truth in labelling – a consumer will know when they are getting advice and when they are being sold a product!

 “Product providers and other gatekeepers in the value chain will be held accountable for their role in any failures that cause consumer detriment – proportional liability. 

“Further, the nomenclature of ‘distribution’ will be dead, buried and cremated in financial planning – no more distribution departments and no more reference to financial planners as being a distributor of products.  Financial planners will be seen as service providers to customers and policy holders of a product provider.

“There will be true specialisations with financial planners being recognised as specialist in a number of both traditional areas like SMSF Advice, Aged Care but also new and emerging areas.” 

As an example he pointed to the US where they have financial planners who specialise in divorce clients. 

Mr De Gori said fee models will become a mixture of fixed pricing and hourly rates, with the majority of fees paid directly from the client and/or true administration platforms. 

“There will be no more ongoing fee arrangements as we know them today but will be an invoice for services actually delivered rather than for services that are promised to be delivered.

“Single, self-licensed business will not be common and many will form co-ops with other self-licensed individuals for shared services, admin, reception, paraplanning, premises etc -very similar to the medical profession.

“There will also be the big advice businesses with wealth management – but equally there will be large professional financial planning firms that will offer a variety of professional services to their clients with no product selling,” he said. 

Mr De Gori concluded that financial planning has a great future but it will be different.

“Those who take the challenge and opportunities that are there will thrive and so too will the profession.”

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