Getting affordable advice to more Australians could require a rethink of policy settings that govern financial advisers giving personal advice, CEOs of the country’s two largest advice networks separately told a parliamentary economics committee on Tuesday.
“I think we need to find a solution regarding how we get affordable advice to more Australians,” AMP CEO Francisco De Ferrari told the House of Representatives Standing Committee on Economics in response to a question from the Australian Labor Party’s Andrew Leigh on whether there is a “permanent underclass” in Australia given the limited access people have to independent financial advice.
De Ferrari raised some form of scoped advice as a potential solution and the possibility that best interest duty may need to be a reviewed to make advice more accessible.
The issue was also on the mind of IOOF CEO Renato Mota during his time in front of the committee, which was chaired by the Liberal Party’s Tim Wilson. Earlier in the day FASEA’s CEO Stephen Glenfield, along with the FPA and AFA CEOs Dante De Gori and Phil Kewin, appeared and were asked questions by committee members. Later in the day Industry Fund Services CEO Catherine Bowtell had her opportunity to respond to the committee’s questions.
When asked to weigh in on the benefits or otherwise of intra-fund advice by the committee, Mota said he agreed with the intent, even though he noted there may be a lack of clarity around the rules that allow advisers within super funds to provide advice under the supervision of the trustee that’s distinct from personal advice within the Australian Financial Services License system.
“The question is: How do you make advice affordable? One of the reasons [super] funds have looked to build [intra-fund advice offerings] is to provide advice in an affordable manner, so I agree with the intent,” Mota said.
“It would be good to have scaled down advice and have affordable advice but for it to not so much depend on the product – intra-fund advice relates to advice within the product,” Mota commented.
Both Mota and De Ferrari pointed to the affordability of advice among the challenges the advice industry faces in the wake of the Hayne royal commission and the resulting raft of regulatory changes in their opening remarks before the committee.
In addition to affordability of advice the committee quizzed the two CEOs responsible for the two largest remaining vertically integrated wealth businesses in the country on a range of topics including progress of the respective companies’ remediation programs, post royal commission advice compliance and audit standards, superannuation access and liquidity, and fees associated with external funds on proprietary platforms and approved product lists.