Brett Jollie (left), Andrew Alcock, Kelly Power and Blake Briggs (source FSC).

The post-Quality of Advice Review landscape should see institutions catering to lower-balance consumers, with holistic advisers working with clients that have complex needs, according to a panel discussion ahead of the government’s response to the review.

Speaking at panel hosted by the Financial Services Council on Thursday evening, CFS Superannuation CEO Kelly Power said the current environment has been “a disaster” for lower-balance clients seeking advice.

“Who is going to invest in giving those people who have $100,000 [balances] advice?” Power said.

“It’s not small boutique licensees, because they have a lot of clients sitting there and are quite profitable – in many cases they’re maxed out.”

Power said organisations like CFS and industry funds will ultimately be relied on to carry the load for mass-market advice, leaving higher-balance clients with complex needs to holistic advisers.

“That was the role that banks played,” Power said. “Say what you will about what happened with that, they were once the incubators bringing in advisers, creating that learning platform, educating them, so they could then go off into these larger licensees. There’s none of that now, there’s no one doing that.”

Power said her business would benefit from any QAR proposal being implemented and the company is behind any change being made.

“We’re being quite pragmatic because ideally we could help those people that have $100,000; but equally, I’d like to see other advisers be able to service more than 100 clients, maybe 200 because that’s a 100 extra people that get a better outcome,” Power said.

Taking the game on

While the advice community has clamoured for red tape reduction that would free up time and reduce the cost to give advice, there remains the issue of how many clients advisers can realistically create a personal relationship with.

At the Professional Planner QAR Roadshow in March, Minister for Financial Services Stephen Jones said there are 5 million Australians looking for advice with fewer than 16,000 advisers to service them, essentially meaning advisers would need to serve more than 300 clients each to close what he believed was the advice gap.

Dunbar’s number, named after British anthropologist Robin Dunbar, suggests the maximum number of stable relationships that can be maintained by an individual is around 150.

Despite famed US adviser and commentator Michael Kitces suggesting the ideal number of clients sits between 75-125, last year’s CoreData Licensee Research found advisers were averaging around 150 clients.

HUB24 chief executive Andrew Alcock said while the advice profession will benefit from Jones’ “quick wins” to simplify regulatory red tape, they won’t move the dial on the access to advice.