Neil Macdonald
The Advisers Association (TAA) believes the Financial Services Council (FSC) blueprint for a simplified regulatory framework is a positive step in the right direction, and has the potential to deliver better outcomes for consumers and advisers.
TAA CEO, Neil Macdonald said, “We are particularly pleased to see the FSC’s call for the separation of product and advice. This would represent a giant leap forward, as in practice it would mean only licensed financial advisers would be able to give financial advice.”
The blueprint was outlined in the FSC’s White Paper on Financial Advice (the White Paper) released earlier this week.
“We are also pleased to see the call to distinguish between financial advice and general information,” Mr Macdonald said. “This would help consumers better understand when they are being given financial advice and when they are merely being supplied with general information by a product provider, for example,” he said.
Mr Macdonald said any legal and regulatory change must put the client front and centre.
“The regulatory reforms that the industry has endured to date may have increased consumer protections, but it has come at too high a price for consumers,” he said. “The cost of providing financial advice, the onerous review requirements and the application of black letter law in relation to fee disclosure statements has made the delivery of advice too unwieldy and far too expensive. We can and we should do better than this.”
Mr Macdonald also said he looks forward to future refinement of the blueprint. “This current version is mainly focussed on new clients, and not as much on the ongoing advice and services provided to existing clients to help them manage their relationship with money, give them real choices and achieve the life they want to live,” he said.
He also said that the proposed timeline is very long, especially with the pent-up demand for advice now, and the intergenerational wealth transfer that will start to accelerate over the next nine years
“However, the blueprint is a sign that we are moving in the right direction. While there is certainly more work to do, with genuine collaboration, and a focus on client and consumer outcomes, we are confident that the financial advice industry has a brighter future.”