IOOF has begun a pro-bono advice experiment its CEO Renato Mota (pictured) hopes will open doors with the 80-plus per cent of working age Australians who are otherwise unlikely to see a financial adviser.
The group, which has seven licensee brands and 1300-odd advisers, will trade three months of licensee fee amnesty with authorised representatives for 60 hours of pro-bono work to service the most vulnerable in the community.
The plan will attempt to approach from another angle the seemingly impossible challenge of getting quality advice to more Australians – a project the Australian Securities Regulator has vowed to prioritise this year. Joanna Bird, ASIC’s executive director, Wealth Management, will describe in more detail the regulator’s ongoing unmet advice needs project this coming Tuesday at the Licensee Summit Digital.
Jane Hume, assistant minister for superannuation, financial services and financial technology, will address the topic of the country’s unmet advice needs during her opening Q&A at the Licensee Summit Digital event, at a time when many are blaming the introduction of regulation for the increasing cost of the delivery of advice.
Mota says he anticipates that at least two thirds of IOOF’s advisers will sign up to the initiative, which he says equates to more than 50,000 hours of free financial advice.
Aside from the pro-bono aspect to the IOOF plan unveiled on Thursday, there’s also the amnesty from licensee fees, which MLC CEO Geoff Lloyd similarly offered to advisers within the National Australia Bank-owned network in at the end of March.
Some sceptics of the move by institutions to offer a temporary amnesty from licensee fees have called the move product subsidisation in disguise. Meanwhile others have raised the possibility that subsidised licensee fees could create an issue for advisers within those networks under the new Code of Ethics standards.
But both Mota and Lloyd contend these are extra-ordinary times, and the crisis it requires an investment in advice when businesses are challenged and clients need access to advice the most.
“With more than 3.5 million Australians currently enrolled in the JobKeeper scheme, and more than 1 million on JobSeeker, many Australians have clearly found themselves under duress because of this pandemic. They need help to get back on their feet,” Mota commented.
“People who may have fallen on tough times are now faced with difficult decisions about whether to access their super early, take a ‘holiday’ from their mortgage, or refinance existing loans and financial arrangements. None of these decisions are easy without appropriate knowledge, tools and guidance,” he said.
In March Lloyd commented: “We are a large business and the planners out there servicing clients are in small businesses, dealing with difficult and different challenges every day.”
Whether IOOF’s pro-bono experiment leads to more people experiencing advice who may never otherwise seek out the service remains to be seen. Access to advice research commissioned over the years by the securities regulator suggest the proportion of the population that have seen or regularly see a financial adviser remains stubbornly static well below 20 per cent.
Opening its “financial hub” for consumers and offering access to free advice will provide an opportunity for some individuals who may have never otherwise paid for a financial advice console to sample the service for the first time.