ASIC will consult with industry in November to find out what is making scaled or limited advice so difficult to provide, according to the regulator’s senior executive leader of advice, Kate Metz.

Speaking on a panel at the Association of Financial Advisers’ virtual conference on Wednesday, Metz said ASIC has been looking at the issue of consumer access to advice “for a long time”. Recent conversations with the public, she explained, have revealed that consumers are often averse to ongoing advice and would prefer to receive it on an occasional basis.

“Time and time again we hear from consumers that they want to be able to access affordable and bite-sized advice,” she said. “So we know that’s what consumers want.”

ASIC believes there is a schism, however, between what consumers want and what the industry is most comfortable providing. “We also know that some segments of industry find it really hard to provide,” she added.

To combat the issue, Metz said ASIC will release a consultation paper next month “which specifically looks at what impediments there are for industry in providing affordable and limited advice”.

The advice lead acknowledged that ASIC had a role to play in bridging the gap by making the regulatory parameters of scaled advice easier to negotiate. The conversations between industry and the regulator have “matured”, she said, and both sides understand where the other is coming from.

“We are really keen to talk to industry about what it is within ASIC’s control that we can change to help industry,” Metz said. “We’re also asking industry to be true about what it is within their control that can be changed.”

Licensees in the way

Metz explained to the panel that the regulator has been frustrated with previous attempts to promote scaled advice within the industry, which it suspects is due in part to licensees’ reluctance to encourage sporadic advice at the expense of ongoing income streams.

“ASIC has given guidance in the past saying that we really support limited or scaled advice, [but] we are hearing from some quarters that licensees don’t really want advisers in that space,” she said. “I don’t know how widespread that view is but it’s certainly a view that we have been hearing frequently.”

ASIC has taken a dim view of the licensees’ role in advice provision recently, particularly when it comes to limited advice. In August Commissioner Danielle Press questioned whether overly conservative compliance divisions within licensees were hampering the provision of scaled advice.

Press said the level of compliance licensees were advocating was “definitely different from the base level of guidance that we give”, and that licensees’ reluctance to adopt ASIC’s compliance relief measures – assumed to be a reference to early access to super advice relief measures – was concerning.

‘We don’t want the status quo’

According to ASIC, the advice industry should go ahead and start coming up with new models to improve the advice gap rather than waiting for the regulator to pave the way.