The release of ASIC’s Consultation Paper 332, Promoting access to affordable advice for consumers,  represents both an acknowledgement from the regulator that the current framework doesn’t support the commercial provision of scaled advice and a willingness to rethink the compliance regime around it.

The paper, which asks advisers for help in understanding “impediments to the delivery of good quality limited advice”, contains several key passages that show ASIC is as willing as it’s ever been to leverage adviser input in finding a solution to the advice gap.

ASIC asks advisers, for example, specifically where they think the cost of compliance could be minimised: “What costs inherent to the provision of advice most affect the ability of your business to provide lower cost personal advice?” the paper asks. “How could these costs be reduced?”

The regulator also reveals an awareness that their previous guidance hasn’t provided enough certainty to advisers. “Despite our guidance and the acknowledgement of limited or scaled advice… many financial advisers and advice licensees remain uncertain about how they can provide compliant limited advice,” the paper states.

Both these points highlight a change in tone from the ASIC. In response to a confluence of events – including “widespread concern” that adviser numbers have dropped 14.6 per cent since January 2019, the preference of consumers for scaled advice and the inability of advisers to commercially provide it – the regulator is signalling that it is significantly more invested in building a bridge between itself and the industry.

“We welcome feedback from the financial advice industry and others with an interest in making advice more accessible to consumers,” Commissioner Danielle Press said in a statement accompanying the paper.

The change in tone is even more stark given that Press herself recently intimated that overly conservative licensees were the ones holding advisers back from delivering scaled advice.

This time around the regulator acknowledged the reluctance of licensees to encourage scaled advice, but attributed it to “uncertainty” rather than subversion.

“We have also been told that, due to the uncertainty about providing limited advice, some advice licensees have restricted their financial advisers from providing limited advice to consumers,” the paper states.

Calculated and open moves

The timing of ASIC’s effort to work more closely with the industry is savvy. With the institutions now effectively out of the picture after withdrawing from advice over the last three years, many legacy interests have been disassembled.

In a further display of its willingness to engage, ASIC is looking for input from advisers on whether it should change the accepted term for “scaled” advice to something like “episodic”, “transactional”, “piece-by-piece”, or its preferred “limited” advice.

Even the presentation of its guidance is ripe for input from advisers.

“We are considering new formats for our guidance,” ASIC states. “What form of guidance would you find most useful for future ASIC guidance on limited advice?”