Review could ease pressures and broaden scope of advice in Australia
Expectations are growing that advisers in Australia will in future be able to operate under less prescriptive rules than are required now.
Thursday, November 17th 2022, 6:02AM 
5 Comments
by Eric Frykberg
In addition, a greater range of people will be able to give advice.
These forecasts come from the professional development body, FINSIA, which covers banking, funds management and securities as well as the provision of financial advice in Australia.
Chief executive Yasser El-Ansary has been visiting New Zealand to speak to some of its 10,000 local members.
Top of his mind is a government enquiry in Australia, the Quality of Advice Review, which is due to report its findings on December 16.
This review looked at several issues which will resonate with New Zealand professionals, such as streamlining and simplifying regulatory compliance obligations to reduce cost and remove duplication.
It asked whether principles-based regulation could replace rules-based regulation, and also considered issues such as disclosure rules and international best practice, along with innovation and digital solutions, among other things.
El-Ansary says the review followed a similar inquiry into banking and was focussed on the financial advice industry which had been facing several difficulties.
“The regulatory burden on financial advisers has grown exponentially over the past decade and that has resulted in two things,” he said.
“One, we have seen an exodus of financial advisers from the profession, and that has limited the availability of advice.
“Two, the regulatory burden has resulted in higher prices needing to be charged in the provision of advice,”
The outcome of the review will not be known for another month, but El-Ansary has been following it closely and thinks several outcomes are likely.
“What I expect to be there (in the findings) is a series of recommendations that deal with opening up the breadth of financial advice and also reducing some of the regulatory impositions that add significantly to the cost of delivering financial advice.”
In terms of the breadth of advice, El-Ansary expects the right to give financial advice could be extended to banks and superannuation funds.
He thinks trends like this are necessary, because all Australians are compelled by law to save for their retirement but do not always have the advice they need to do so well.
“Every Australian, by virtue of having that superannuation retirement account, ultimately does need a level of financial advice.
“This is not just the domain of the wealthy and have lots of money to invest, this is the domain of every single worker in our economy.”
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Comments from our readers
El-Ansary would do well to understand the industry before making meaningless predictions & comments
Instead of "better" customer outcomes all that regulation has achieved here is to create new jobs for overpaid civil servants and increased revenue streams for education & compliance providers, PI insurers and certain aggregators. None of this is benefiting the NZ consumer. As I’ve said before licensing of the financial services industry was supposed to be about improving the quality of advice that consumers receive. Instead, it’s looking increasingly like its legacy will be one of consumers access to quality advice been markedly reduced from March 2023 with many experienced advisers electing to exit the industry. The consumer is being disadvantaged if their trusted adviser of many years now decides that there are easier ways to make a living or opts to retire early.
Somewhere along the way a process that started with good intentions for the consumer ended up becoming highjacked by Government bureaucrats and education & compliance providers all of whom have turned licensing into an opportunity to create more money and jobs for themselves. Hopefully though, the lessons learned across the Tasman for the adviser community there will flow here. With luck we are going to see a new Government in office from late next year so expect to see a lot of the regulation this current lot have introduced ending up for the chop. We already know that the CCCFA changes are going under a National lead Government, and I wouldn't mind betting also that they will take a good hard look at CoFi and the FSLA Act. The latter been especially relevant for financial advisers.
Without stating the obvious New Zealand is now drowning in a sea of regulation adding unnecessary cost and complexity to industry, not just financial services. The introduction of compulsory dispute resolution schemes was the last best thing to clearly benefit consumers when they need to access financial advice be it from an adviser or provider. Everything else that has subsequently been introduced or recommended for the financial services industry is not adding measurable benefit to the consumer and them actually experiencing a “better" customer outcome.
if i may add to the gravy train:
- certain aggregator group/s made it compulsory that their members must take PI through them? why? any conflict of interests?
- a particular educational provider told advisers to do certain course/s which are not required? why? gouging?
i suspect various fee for advisers will go up next year to sustain the various organisations with lesser advisers - watch this space. for this, i want to be wrong.
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two .... resulted in higher pricing
did this even surprise anyone?
isn't it the most basic of dd and ss college students are being taught in economics?
await to hear from the "experts" who created these regulations for "better" customer outcome.