The corporate regulator said it will proceed with a number of ideas to improve the regulatory settings around advice, as part of its response to Consultation Paper 332 Promoting access to affordable advice for consumers.

Late last week ASIC released an infographic summarizing the feedback it received through 466 submissions from advisers, licensees, accountants, industry associations, consumer groups, academics and lawyers.

The consultation also involved roundtables with key stakeholders to discuss key issues and outline possible solutions, ASIC said.

“Based on feedback received in submissions to CP 332 and roundtable discussions, we have identified a range of ASIC-led initiatives that we think will help industry participants to provide good-quality, affordable personal advice to consumers,” the regulator stated. “ASIC intends to move forward with these initiatives as resources permit.”

The initiatives ASIC referred to should relate directly to the regulator’s findings, which are broken down into five key areas.

Respondents pinpointed “overhead and fixed costs” as a major contributor to the cost of advice, along with statement of advice preparation, rising governance costs and conservative licensee procedures. ASIC added a note (in bold) saying that 146 respondents (or 31 per cent of total) “supported allowing greater use of RoAs”, indicating this is a likely area the initiatives with touch on.

One of the other four learning areas for the regulator – there were five, total – was that its own guidance, in particular RG 244 (Giving information, general advice and scaled advice), is “too long and needs restructuring”. The example statement of advice for new clients ASIC provides in RG 90 is described as “long, repetitive and not client-friendly”.

Limited advice was also an area of focus for respondents. While 199 advisers indicated they already provide limited advice, impediments to its provision include high costs and the fact that the regulatory requirements to provide comprehensive or limited advice are the same.

There were also concerns about breaching the FASEA code of ethics, uncertainty about the regulatory requirements and restrictions from licensees to contend with.

The term ‘limited advice’ is favoured by the majority over synonyms like ‘scaled’ or ‘episodic’ advice, ASIC noted.

Another area ASIC’s initiatives may focus on is strategic advice. Uncertainty about legal requirements is a major concern for advisers providing strategic advice and this has filtered down, respondents say, into licensee conservatism. 138 respondents thought more guidance from ASIC was needed and additional examples of giving compliant advice would be “useful”.

The fifth area of concern for respondents, ASIC says, related to digital advice. A lack of demand from consumers and compliance concerns led to 148 out of 215 adviser reporting they do not provide digital advice.

Whichever of these findings ASIC chooses to pursue with its initiatives, it’s likely Treasury will be involved given that it is handling the government’s inquiry into advice next year.

The level to which they are taken up will also be affected by other factors such as funding, timing, and the pandemic, as per ASIC’s note that it will move forward “as resources permit”.