Geoff Pacecca (left) and Chandra Krishnamurti

To really improve access to advice for lower socio-economic groups, a clear-cut three-pronged strategy must be put in place according to a study put out by academics from the University of South Australia.

This strategy involves, in the words of professor Chandra Krishnamurti: “…increasing awareness of the benefits, government rebates on advice fees, and a streamlined advice format for these groups”.

The study – funded by Magellan Asset Management, Centrepoint Alliance, the Financial Planning Association of Australia and the Financial Planning Education Council – proposes targeted policy support for financial planning on these three lines.

Neither of the three measures are new, but the study provides a succinct blueprint for policymakers leading into the Quality of Advice Review, which is due to hand down its findings in December.

The first measure – increasing awareness – involves “shifting the perception that finanical planning is just about helping rich people”, the paper notes.

The second proposal involving government rebates for upfront advice is a long-held policy plank of the FPA and has been touted as the key to unlocking financial advice to the masses.

“There was strong support – from both consumers and financial planners – for the idea of a government rebate for initial advice fees,” Krishnamurti states. “If this rebate were targeted at consumers who are seeking retirement planning and superannuation advice, it could greatly improve the financial security of this group and reduce pressure on the age pension system.”

The third measure is a “streamlined advice format” aimed at delivering retirement advice for low-income earners.

“It would be possible to reduce compliance time – and thus cost – for financial advice providers by establishing a short-form statement of advice format for retirement-age people from lower income groups who are seeking retirement planning advice,” says director of GAP Financial, Geoff Pacecca.

“Many people from this group have relatively low levels of complexity in their financial advice needs, so a short-form approach would help reduce costs while still delivering valuable advice.”