Money Solutions will act as an advice partner to ING Direct at a time when phone-based advice services are facing increased regulator scrutiny as part of the wider debate around scaled advice.
ING Direct selected Money Solutions to answer all personal advice questions that stem from its entry into the superannuation sector – with ING Direct Living Super – based on its experience as a “pioneer in the delivery of high quality, cost-effective advice over the phone”.
I’ll just put you on hold
While Ross Bowden (right), Money Solutions chief executive, confirmed to Professional Planner Online that the service is not officially Future of Financial Advice (FoFA) compliant, he said recent changes meant this was just a formality.
“We haven’t technically opted-in to FoFA yet as some of the issues are still in the consultation phase,” he said.
Last month the Australian Securities and Investments Commission (ASIC) released consultation papers containing proposed guidance for two aspects of the FoFA reforms – scaled advice and the best interests duty.
ASIC’s proposed guidance on scaled advice will apply to all industry sectors, including super, financial planners, and banks and insurers, and includes practical guidance and examples about giving scaled personal advice, as well as examples about giving factual information and general advice to clients.
One thing at a time
Bowden says a scalable and affordable fee-for-service advice model is not only possible but desirable.
“Some people say you can’t scale down advice to this degree, but that isn’t our experience,” he said.
“The Money Solutions advice model is delivered directly to customers by our advisers, either from a money coach, a senior money coach or a retirement specialist, depending on who we are talking to.”
In practice, this means dealing with one issue at a time while more complex enquiries are referred to a senior money coach or a face-to-face meeting with a planner if more comprehensive advice is required.
Bowden describes ASIC’s consultation paper on scaled advice as “a very solid document” and points to it’s central premise that it is possible to provide less complex advice in a way that is consistent with the best interests duty and the law generally.
However, Richard Batten, a partner with Minter Ellison Lawyers, is concerned that the consultation papers contain a number of specific examples, which may be open to challenge.
“Examples are fine but the situations in which advice is given are inherently complex and it is difficult to replicate the subtlety and nuance of an advice provider speaking with a client,” he said.
Submissions to ASIC on scaled advice and the best interests duty guidance close on September 20.
